Rates of used car depreciation in the UK slowed during the third quarter of 2005 and values are expected to stabilise further still during October, according to valuation specialist EurotaxGlass’s.

An average three-year-old car (2002 02-plate with 36,000 miles up) was worth £6,650 by the end of September, a fall in value of 3.6%, or £250, over the quarter, it said.

At the start of the last quarter, used car values were on average £275 lower than at the same point in 2004 but that deficit reduced to £200 by the end of September should shrink to just £50 by the end of this month.

“The improvement in residual values is due to a market-wide increase in trade demand,” said a EurotaxGlass’s spokesman.

“In the early part of the summer, dealers were less than optimistic about sales prospects and consequently bought in less used car stock. When it became apparent that there was a sustainable level of consumer demand, and their stocks were less than adequate, general wholesale trading increased, with the result that prices became firmer by September.”

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Values continue to be strongest for well-specified vehicles in those sectors most in demand, such as small and family cars and those with diesel engines.

But there is no sign the buoyancy experienced towards the end of the third quarter and into October will continue for the last two months of the year.