THE average three-year residual values for cars across Europe have fallen dramatically over the past year, new research reveals.

Average values fleets are achieving at disposal time have fallen for the first quarter since the end of last year.

This is partly due because 'the positive effect of important new model introductions declines', the EurotaxGlass's European Fleet Index of Residual Values shows.

Compiled by eurocarprice.com, the index shows the average values in Europe during last month were 2.7% lower than 12 months ago. Four of the 'big five' markets are now experiencing negative trends with Italy in particular seeing a substantial drop in values of -9%, the study found.

It added: 'The gradual decline in France and Germany continues. Values in Austria, Belgium, the Netherlands, Hungary and Poland are gradually increasing but there are small reductions in Portugal and Switzerland.'

It found that values are dropping in almost all segments, with lower-medium diesels being the main exception.

It added: 'In the small segment, Renault Clio and Seat Ibiza are the best performers, Fiat Punto is the worst. The Peugeot 307 is now three years old and is having a positive effect on the lower-medium segment where diesels are performing much better than petrol models. The positive influence of the new Ford Mondeo on the upper-medium segment is not so strong now that it is four years old, although the Renault Laguna is still performing well compared to the previous model. Audi A4, BMW 3-series and Volkswagen Passat are other positive performers.'

It found that most values in the executive segment are on the decline, particularly BMW 5-series and Mercedes-Benz E-class.