A report by business information provider Datamonitor claims that 79,000 ex-fleet used cars a year will be sold online in western Europe by 2005.
It says the internet is becoming the main route to resell used cars and maintain residual values for manufacturers, fleet operators and dealers.
The research forecasts that internet remarketing of vehicles will grow by 60% over the next five years. It also estimates that manufacturers, leasing and rental companies will remarket 14.7m cars across Europe by 2005.
According to the figures, supply in the fleet sector is outstripping demand and the resulting excess stock is causing a fall in the value of used cars and dwindling profit margins for dealers and fleet operators.
Datamonitor forecasts residual used car values could fall 2% by the end of the year if the trend continues, mirrored by a drop of £3.5bn in used car sales revenue across the whole of Europe.