USED CAR PRICE CRASH

Sunday Mirror, May 25, 2008 by JIM CLARKE

THE cost of second-hand luxury cars is collapsing as economic worries force drivers to tighten their belts.

Rising fuel prices and the increase in VRT for bigger vehicles has started turning drivers away from top-end motors.

Three-year-old Range Rovers, Lexuses and Mercedes are already a whopping EUR3,000 cheaper now than they were this time last year. And even five-year-old cars are an average of EUR2,000 cheaper, according to figures from the latest GE Money used car index.

Now the motoring industry is bracing itself for the impact of the new VRT legislation which will come into effect after next month.

The new laws will penalise those driving bigger cars which produce more carbon emissions.

Traditionally, car prices slump a little during summer months. And according to GE's Head of Auto Finance Nigel Rutherford prices will continue to fall for the rest of the year.

"Downward pressures on prices are expected to continue throughout the remainder of the year," he said.

"The extent to which this will be reflected in used car values will depend on the level of customer demand for new cars post July and the relative effect on trade-in values given the changes in VRT and road tax.

"Given the value currently available, this is clearly good news for consumers looking to buy a used car in 2008."