In Britain, new car prices have been falling for some time. That's also causing prices in the used car market to decline and there's more decline in the pipeline according to Lex Vehicle Leasing's latest analysis of the used car market through to 2006. Britain's 2002 new car market was 2.56 million units. This year's market could reach 2.4 million units. Lex research says that the growing supply of three-year-old (the standard fleet ownership period from new) cars could cause a 10% drop in residual values - £500 on a typical fleet car. And there could be some big bargains in used fleet diesels coming on to the market reflecting the recent boom in diesel sales - now approaching 30% of annual UK new car sales. Is the used car market, dominated by private retail buyers, ready for the volume of diesels that will eventually flood on to the market? If not, prices will soften even further.