FLEET operators over-specifying luxurious optional add-ons face paying big residual value penalties three years down the line. Used market experts at both CAP Black Book and Glass's Guide are warning fleet managers against 'loading' their company cars with expensive extras, the cost of which they cannot recover on disposal.

While a top spec upper medium car may cost several thousand pounds more than its mid-range counterpart, the price difference evaporates to just a couple of hundred pounds after three years. The problem has worsened in recent years as ever-increasing customer expectations force the manufacturers to fit more and more creature comforts as standard.

Some well-chosen options can however enhance residuals, while the absence of others can seriously detract from the resale value of certain models. Power steering is now expected on even the smallest supermini and will hold its value even if it is a cost option new, while the lack of alloy wheels on a BMW 3-series will put a severe dent in its resale appeal. The growing popularity of air conditioning is likely to make it 'de rigeur' in the near future.