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Used car prices in recovery

Used car retail activity has shown signs of recovery, according to the latest Manheim Market Analysis report.

Wholesale volumes increased in the first quarter of 2006 by 24.5% compared to the final quarter of 2005.

Prices have risen this year, but have still not recovered to the same levels of the first quarter of 2005. Manheim predicts downward pressures on values, particularly nearly new models, later this year.

The age and mileage profile of vehicles from dealers is little changed at 85 months and 70,625 miles. Average selling price remains static at £2,545 or 18% of original cost new. Dealers are turning part exchanges into cash within four days on average.

Superminis leads on residuals at 46% with the average selling price rising by 6% or £218 compared with the previous quarter, to £3,669. Large family models only retained 30% of their new price, the lowest of the eight segments.

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