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Premium convertibles and 4x4s are UK's best depreciation beaters – Glass's

Glass's Market Intelligence Service suggests that the residual values for prestige convertibles (e.g. Mercedes CLK Cabriolet, Audi A4 Cabriolet) and larger 4x4s (e.g. Range Rover, BMW X5) aged one- to three-years-old out-perform those of the rest of the market.

Glass's also reports that the value of the average one year-old used car is continuing to fall at a higher rate compared to older examples, largely due to the incentives that retailers are still attaching to the sale of new vehicles. In September 2002 the typical one-year-old car in the UK retained 64.7 per cent of its original purchase price, but by September of this year the figure had fallen to 63.2 per cent. By contrast, the average residual value of a three-year-old car has fared much better, with a more modest fall of just 0.6 per cent over the 12-month period to September 2003 (from 45.6 per cent down to 45 per cent).

"Looking at the next three years, we are expecting an overall decline in used car values because the used market will have to bear the consequences of record new car sales in 2002 and 2003," comments Alan Cole, consultant for Glass's Market Intelligence. "Furthermore, the growth in consumer spending will slow over this period because current levels of mortgage equity release are unsustainable and taxation is expected to be an increasing burden."

Cole adds, "However, within this market-wide decline in residuals, we are predicting relative stability in the values of upper-medium cars, large cars, general market coupes, full size MPVs and prestige and volume brand convertibles."

"Residual values are likely to improve for superminis and small cars, lower-medium cars, luxury saloons and lifestyle 4x4s. Premium upper medium cars, premium large cars, compact MPVs and full size 4x4s should lose ground compared to the rest of the market," he concludes.

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