Car Insurance
Fall in car value depreciation reported
Tue, 11 Oct 2005
Increasing popularity of second-hand cars has resulted in a fall in depreciation levels for brand new vehicles, a report has shown.
Findings by EurotaxGlass’s indicate that a reduction of £250 in the value of the average three-year old car took place over the previous quarter; a figure 3.6 per cent of the vehicle's total value.
Used car values were lower this July than at the same point last year, falling by an average figure of £275. However, that deficit reduced to £200 by the end of September and is predicted to shrink to just £50 by the end of the month.
"The improvement in residual values is due to a market-wide increase in trade demand," said Alan Cole, editorial consultant for EurotaxGlass’s.
"In the early part of the summer, dealers were less than 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."
Second-hand values continue to be strongest for those vehicles most in demand, such as family cars and vehicles with diesel engines, proving more appealing to drivers looking to lower insurance premiums by taking out cheap car insurance.
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