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CAP records slowdown in 'D' segment depreciation as fleets adjust disposal policies

Larger family cars depreciated more slowly this year than during 2002 as stability returned to the used car market, reports CAP Black Book.

Black Book research during 2003 has consistently revealed better performance by so-called 'D sector' – Mondeo/Vectra-sized - cars which have come under ever increasing pressure in recent years as economy or practicality-driven used car buyers turned to smaller cars or MPVs.

For example, the trade value of a Vauxhall Vectra 1.8 LS, at three years and 30,000 miles, fell during the course of 2003 by £625 – a big improvement on the £900 lost by the equivalent car in 2002.

Ford Mondeo fared even better, thanks to this year's three-year-old version being an updated model and therefore more desirable. A 1.8 LX model, on a 2000 X plate, with 30,000 miles, almost halved its depreciation with a loss of just £550 compared with £1,000 last year.

Black Book Senior Editor, Tony Styles, said: “The conclusion to draw from the performance of larger family cars during 2003 is of the primacy of volume in the process of determining market values.

“While there was a widespread trade expectation of large influxes of cars from the start of the year, as time went on and volumes remained low, trade buyers were then forced into bidding more strongly to fulfill retail demand.

“Driving this relative shortage of quality used car stock has been a policy adopted this year among many fleets of extending contracts or raising the mileages at which cars should be disposed of. For example, research this week has revealed that one former public utility company which normally disposes of 12,000 vans and 6,000 cars annually reduced these figures in 2003 to 8,000 and 4,000 respectively.

“With similar strategies adopted elsewhere around the industry it is clear why the balance of supply and demand has improved so much and therefore helped firm up prices during 2003.”

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