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Think big with smallest cars

The supermini sector has seen an enormous amount of investment and development over the past year or so. Many of the biggest launches have been the smallest cars and there are very good reasons for this.

Regular readers will already know my views on the future of residual values. Increasingly, fuel economy and sheer driving convenience on our cities' ever more choked streets will prove a major incentive to think small.

The process is also being helped along, as I have mentioned on a number of occasions, by the efforts of manufacturers to enhance the quality and refinement of smaller cars.

Downsizing certainly makes sense for many used car customers. Look at what a tremendous car the Toyota Yaris, for example, will look when it becomes readily available at more affordable money on a used forecourt.

New small cars are performing better than their predecessors in terms of future residual values and this is a function of that process. Residuals are all about desirability and fitness for purpose and each new model is streets ahead of its ancestors in both.

One thing really does stand out from these figures and that is the outstanding performance of the Peugeot for percentage of value retained.

Priced today at £9,370, Cap forecasts that the Peugeot 206 1.1 LX 5dr will be worth £3,675 after three years/60,000 miles - or 39% of cost new.

Peugeot should be well satisfied with this performance given that only a few years ago there was a good deal of wariness on the used market over French cars.

Horror stories about Citroen suspension systems dumping their hydraulic fluid everywhere were just the tip of the iceberg. Peugeot has eradicated the fears while retaining a strong element of styling to differentiate the 206 from others in its class. That's the trick - to achieve a design which stands out on the road yet exhibits the solid reliability of a less attractive or interesting vehicle - and the 206 is a real result for Peugeot.

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