Mixed news for used-car business

There has been a slight boost to the used-car market following hard times over the last year as hard-pressed consumers hit by the credit crunch avoided the forecourts.

The rate at which city cars are depreciating has slowed considerably, particularly at 12 months old, according to vehicle history-check service HPI.

However, the company also warned that the overall picture still showed serious declines, with three-year-old cars on average plunging from 25.5% depreciation to 28.1%. Three-year-old petrol cars have reported the greatest decline, from 27% to a shocking 30%.

HPI's valuation expert, Martin Keighley, said: "The new market could be the key to recovery or failure.

"Manufacturers continue to tell us that new prices have to keep rising, due to increased costs, but this logic flies in the face of a 1 market where house, used vehicles and even oil prices are falling.

"Reliance in web-based car sales sites for ball-park valuations is therefore extremely misleading. There is no substitute for experience and independent market research. Used values for November are generally down apart from smaller cars which remain stable. We can expect further falls for December."

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