Values of second-hand prestige compact saloons will come under increasing pressure during 2003 as rival manufacturers engage in an fierce battle for sales of new models, says Glass’s Information Services.

“Despite a natural slowdown in the UK car market as a whole, the key players in the prestige saloon market – BMW, Mercedes, Audi, Lexus and Jaguar – are very reluctant to reduce their sales targets for the coming year,” said Glass’s specialist car editor Richard Crosthwaite. “This has led to some uncharacteristically aggressive marketing initiatives which, together with dwindling sales, should undermine some traditionally robust residual values.”

The latest moves comes from BMW with the offer of three years’ free servicing and maintenance for all new 3 and 5 Series diesel models. “It is clear that BMW’s rivals will struggle find the funds to match this offer in the short term, but the values of used 3 and 5 Series diesel models without the service and maintenance package may soon suffer,” adds Crosthwaite.