Motorists turning to budget cars

The economy and fuel prices are impacting on the used car market although the demand for budget vehicles remains strong, according to the latest research from Manheim.

The company's monthly market analysis shows that budget vehicles are proving increasingly popular with people buying a car, while the demand for used cars in general is dropping.

In July 2008 a used car cost on average £6,171, down £413 compared with June and £587 compared with July 2007.

Mike Pilkington, managing director of Manheim Auctions & Remarketing, said: "The tougher market for wholesale used cars first reported earlier this year and further undermined by the seasonal downturn at this time of the year looks set to continue for some time.

"However, reassuringly, interest in the lower priced 'budget' vehicles at auction remains high confirming that there continues to be demand in the marketplace if the price is right."

An increase in the average selling price for cars in June in the supermini category did not occur in July, but the small and large coupe segments saw an increase of 2.6% and 1.3% respectively.

Larger and family cars took a considerably worse hit, with prices falling 10.2%.

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