The typical Y-plate vehicle with 36,000 miles is now £7,423.
Glass’s says the fall reflects a slightly higher rate of depreciation compared to the first quarter of the year, although values themselves are still higher than in the second quarter of 2003.
Compact MPVs have suffered the greatest falls in their value over recent months.
Glass’s says current rates of depreciation may accelerate slightly due to higher interest rates, fuel prices and a degree of growing uncertainty about the housing market. It predicts a 2.5% fall in the value of the average three-year-old Y-plated car during July, and suggests a possible increase in the rate of depreciation over the coming calendar-year quarter.
Key extracts from the latest Glass’s Car Market Index:
1) Trends in three-year-old car values
Comparing the second quarter of 2004 with the same period last year, average three-year-old used car values currently remain higher. Glass’s says this positive difference has narrowed, from £540 at the end of the first quarter of this year to £425 by the end of the second quarter. This difference is likely to narrow further in the next few months. The degree to which confidence will weaken depends largely on future base rate action by the Bank of England and the buoyancy of the housing market.
2) Trends in new car list prices
Since June of last year, list prices have increased, on average, by 1.6 per cent, or £265. Glass’s says further increases are inevitable as manufacturers increase the model specifications and introduce technical enhancements such as Euro IV compliant diesel engines.
However, it is unlikely the rise in list prices has been mirrored by transaction prices. “The requirement to maintain or enhance market share has led to a proliferation of ever-more competitive incentives, and therefore transaction prices are unlikely to have increased at the same rate as list prices," says Alan Cole, editorial consultant at Glass’s.
3) Used car value trends – one-year-old cars
The Car Market Index assesses the values of nearly new cars, up to one-year-old. Since the end of the first quarter of this year, values of one-year-old 03-plated cars have, on average, reduced by £502 or 4.4%. This downward trend is expected to continue during July.
4) Used car value trends – five-year-old cars
Since the end of the first quarter of this year, five-year-old T-plated used cars have reduced in average value by £325 or 6.3 per cent. This softening of values is expected to continue into the summer.
5) Trends in three-year-old car values by market sector
The Car Market Index provides detailed insight into patterns of changing residual values in key market sectors. To find details of the residual value performance of individual models, please request the full version of the latest Car Market Index report (see contact information, below).
The sectors covered in the Index are as follows:
The next Glass’s Car Market Index report will profile the third quarter of 2004 (July to September) and will be published in early October.