Fleet and leasing companies saw residual values increase significantly in 2006.

BCA said the average price of a car sold at its auctions was £6,525, up 5.6% on 2005.

With buyers at auction competing strongly in the sector last year, BCA saw average values for the typical three-year old, 60,000-mile fleet car rise from £6,222 in 2005 to £6,575 in 2006.

'BCA saw a significant rise in average fleet and lease values which reflected the sustained demand from motorists ‘pulling’ these vehicles through the wholesale market.

'Interestingly, both the average age and mileage of the fleet vehicles we sold in Q4 2006 increased, the former by two months and the latter by 4,000 miles against the same period in 2005. This time extension of two months represents a value of circa 5%, which in effect, means that supply has been reduced by about this amount. When supply is short (and this has been in evidence all year in the wholesale market) and demand is unchanged, prices will rise,' said the remarketing group in its Pulse report.

Fleet/lease market Q4 2006

Source: BCA

Fleet/lease market – 2006/05

Source BCA

Monthly values were significantly higher in 2006 – average prices only once exceeded £6,500 in 2005 – that value was exceeded nine times in 2006 . This resulted in an average price of £6,575 for a fleet/lease car in 2006. This is £353 (5.6%) ahead of the figure of £6,222 recorded in 2005, and £498 (8.2%) higher than the 2004 average of £6,077.