THE used market in 2007 is likely to follow the same pattern of unit sales, profitability and residual values as 2006.

According to predictions from EurotaxGlass’s, the sale of new and used cars is unlikely to climb this year, while supply of used cars could fall back in line with demand.

Adrian Rushmore, managing editor at EurotaxGlass’s, said: ‘The more cautious approach that many consumers are now taking towards their spending looks set to continue, especially when it comes to higher-cost items. Demand for new and used cars won’t be helped by fears over further increases in base rates. The relatively modest pace of house price inflation will also mean fewer people are willing to free up equity to finance a vehicle purchase.’

Last year, according to EurotaxGlass’s, residual values improved across nearly all sectors compared to 2005. A used value for a three-year-old car improved by around 3% on average.

Rushmore said: ‘The mini consumer boom was at its height in 2003 and, given that the normal period of used car ownership is just over three years, a proportionally higher number of people considered a change last year – although a significant number deferred their decisions on financial grounds. Furthermore, the declines in residual values that we have witnessed over the last 10 years have persuaded more owners that a used car now represents good value for money.’

Rushmore says the modest reduction in used car supply also played its part.

He added: ‘New car registrations have been easing back since 2004. The decision of some major carmakers – notably Vauxhall – to reduce low-margin sales to vehicle rental businesses has also affected the availability of used car stock.’