Reduced used car prices to benefit car loan customers

There is good news for car loan customers who want to make their money stretch. Experts have predicted a 12% fall in the price of used cars between now and Christmas.

The usual rate of second hand car depreciation is about 4% in the run-up to the Christmas season. The figures come from Glass's Guide, which is widely considered to be the motor industry's pricing bible.

According to the forecast, a three-year-old car with an original price tag of £5000 will be £600 for a car loan customer looking to buy a second hand car for Christmas. Last year, a car of the same value would have fallen by just over £200.

The rising cost of fuel has put pressure on dealers to offer attractive vehicle prices to car loan customers.

Adrian Rushmore, managing editor of EurotaxGlass's, the publishers of Glass's Guide, commented: "The view is the market will remain difficult for the next few months at least. The difficulty for dealers is the rate of price falls from one month to the next.

"Retailers have been responding by adjusting forecourt prices. But maintaining unit sales in line with targets has inevitably come at the cost of much lower margins."