The impact of the credit crunch means used car values will plummet faster than previously in the run up to Christmas.

EurotaxGlass’s believes values will fall by at least 12% between now and the end of the year, as retail demand continues to ease and the supply of second-hand vehicles exceeds dmand. 

For a three-year-old car worth £5,000, this will mean a drop in value of almost three times more than the £225 decline seen during the same period in 2007.

Dealers have reported that retail demand has been lacklustre for most of the summer. Trade prices fell by 5% in July alone, the highest drop of 2008 so far.

Adrian Rushmore, EurotaxGlass’s managing editor, said: “The widely held view is that the market will remain difficult for the next few months at least.