THE value of three-year-old cars showed signs of stabilising during the third quarter of 2005.

Rates of depreciation slowed between July and September, and the trend is expected to continue.

According to the Glass’s Used Car Market Index, the average 02 plate car with 36,000 miles on the clock was worth £6,650 by the end of September, representing a fall in value of 3.6%, or £250, over the quarter.

At the same point in the last quarter, July, used car values were on average £275 lower year-on-year.

But that deficit shrank to £200 by the end of September, and EurotaxGlass’s, which publishes the report, expects that to reduce still further to just £50 by the end of October.

Alan Cole, editorial consultant for EurotaxGlass’s, said: ‘The improvement in residual values is due to a market-wide increase in trade demand.

‘In the early part of the summer, dealers were less optimistic about sales prospects and consequently bought in less used car stock.

‘When it became apparent that there was a sustainable level of consumer demand, and their stocks were less than adequate, general wholesale trading increased, with the result that prices became firmer by September.’

Values continue to be strongest for well-specified vehicles in those sectors most in demand, such as small and family cars and diesel models.

Cole continued: ‘There must also remain a big question mark as to whether the buoyancy experienced towards the end of the third quarter and into October can continue for the last two months of the year.’

Small vans do well, but condition is all-important

THE small used van market is healthy – but the condition of vehicles is paramount to sales success, according to latest information from Glass’s.

The buoyant market is continuing to bring stable prices for many older model ranges such as Ford Escort and Couriers when presented well and supported with a full history. Condition is paramount, meaning scruffier vans perform badly. Citroen’s C15D is seen by some as representing excellent value for money at under £5,000 new, but this view is not shared in the used market. Few are coming up for sale in good condition.

Demand for the Berlingo remains good, though, with the latest side-loading models generating the most interest.

Fiat’s Doblo Cargo is under continuous downward market pressure as more late-year vehicles, some with only delivery mileage, come up for displosal. Fortunately, there are sufficient used buyers for the model.

Ford’s Transit Connect remains stable, but the number appearing at auction is adversely affecting prices. Diesel models and higher-specced vans with side-loading doors are most popular.