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UK residual values fall in last quarter

European average three-year residual values for cars are 0.1% higher than 12 months ago, while three-year values in the UK have risen by 4.5%, according to EurotaxGlass’s.

After the strong start to 2004 in European residual values, there are signs of a slowdown, according to the latest EurotaxGlass's Fleet index. The index measures three-year trade values for approximately 40 benchmark models that are important for the fleet market.

Although average values have increased for the fourth quarter in succession compared to 12 months earlier, the Index shows that average values in Europe in August 2004 were 0.1% higher than 12 months ago and 1.5% higher than in June this year.

Six continental markets now show a downward trend. France (-2.2%) and Germany (-1.0%) have joined Italy, Portugal, Switzerland and Czech Republic, which already had negative 12-month trends.

There are signs of a slowdown in the UK market, with values dropping by 6% last quarter and a year-on-year increase of 4.5% (compared to 7.9% in the year to May 2004). Average UK prices for three-year-old used cars in the UK rose by 4.5% over the 12 months to August 2004.

However, the residual value trend in the UK in the three months from June this year to August 2004 was for prices to decline by 6.0% compared to the previous quarter. Nevertheless, residual values in the UK remain 6% higher than the euro currency zone average.

Overall, in the third quarter of 2004, diesel cars in the UK retained 39% of their original value after three years, down 2.7% compared to the second quarter. Petrol models retained 37% of their original price, down 3.4% compared to the second quarter.

Over Western Europe as a whole, the average car in the EurotaxGlass's Fleet Index retains 43% of its original value. Diesels overall retain 46% and petrol variants retain 40%.

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