THE Government has been warned not to damage residual values if it goes ahead with proposals to change the present August 1 registration plate system.

In the pre-Christmas consultation document released by the Department of Transport four alternatives to the present system were outlined, including a three or four times a year age-based plate change favoured by the Society of Motor Manufacturers and Traders and the Retail Motor Industry Federation.

Other alternatives to replace the present system, which must come to an end by 2004, are based on geographical areas, a combination of age and area identifiers and a system with no age or area identifiers. However, any change may not come into place for at least two or three years, with 1999 perhaps being the year of change.

This week Shadow Transport Secretary Andrew Smith said the Labour Party would act on the outcome of the consultation process should it win the general election to be held within the next five months.

Following publication of the consultation document Arnie Fenn, chief editor of Glass's Guide, said: 'There will be residual value turmoil. It will cause upheaval in the way fleets do business because it will knock down the price of cars.' He said a three or four times a year plate change would end the current precedent of buyers of ex-fleet cars paying a premium for a P-plate car over an N-plate car even though they were just a month or two newer.

CAP Motor Research operations director Andrew Wilkinson said: 'We have had enough trouble keeping the car factories running in this country in recent years. Tinkering around with consumer demand, just when the market is recovering, needs a lot of careful consideration. I'm a little bit worried that this is being done for all the wrong reasons.'

Comments on the consultation document should be sent to Stephen Clarke, Licensing and Roadworthiness Policy Division, Department of Transport, Room 2/09 Great Minster Housem 76 Marsham Street, London SW1P 4DR.