At the start of the last quarter (April 1, 2005), the value of the average three-year-old used car was £250 lower than at the same point 12 months earlier, and by the end of June the gap had widened to £275.
During the second quarter of 2005, the trade value of the average three-year-old used car (02-plate with 36,000 miles) was £7,046, representing a fall in value of 4.1% or £325 over the quarter. Experts predict values will fall by a further 2.2% to £6,893 by the end of July. According to the latest Glass’s Used Car Market Index published by EurotaxGlass’s, the situation will not improve over the summer, as demand for used cars tails off.
Alan Cole, editorial consultant for EurotaxGlass’s, said: ‘In the post-election period, there was a modest recovery in retail demand for three-year-old cars, but this proved short-lived. Sales of used cars continue to be heavily influenced by the prevailing economic conditions. With general inflation well under control and any future interest rate change more than likely to be in a downward direction, it could be expected that the used car market would show signs of stability. However, this has not been the case.’
The segments affected most and least by the falls were the usual suspects. The lowest drops were seen in the compact executive sector, while the upper medium volume market performed worst.