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Residual values on nearly new cars slip

Date: 11 December 2013

Residual values on cars less than a year old have started to decrease in comparison with those for three-year-old vehicles, according to Glass's Guide.

Speaking at the Finance and Leasing Association's annual motor conference, Glass's European managing director Michael Bergmann attributed the numbers to the pressure of overproduction within Europe as a whole.

"There are five million cars built within the EU that are sat in stock at the moment.

"One-year-old car residual values are showing signs of separation from the increasing values on cars three years old, which we see as stable for the next 12 months."

A spokesman for Glass's added that the introduction of attractive finance deals in the consumer market at the start of 2011 meant that buyers looking for a nearly new car would simply switch to new cars, in turn depressing the values of nearly new cars.

Bergmann added that oversupply meant that 16.7% of all new cars registered in 2013 were sold to a new owner within 90 days.

UK new car registrations are currently running up 10% year-on-year with 1.95 million units 'sold' to the end of October. If the 16.7% figure is accurate, then this would equate to around 375,000 vehicles for the whole of 2013, which is forecast to hit 2.25 million.