USED car prices already take account of anticipated new car price reductions, with average second-hand prices year-on-year tumbling by up to £1,000 on mainstream vehicles, according to the January issue of Glass's Guide. Fearing that manufacturers may cut new car prices by up to 15% in anticipation of a scathing Competition Commission New Car Pricing Inquiry report, used car traders have been cautious when buying speculatively for stock and they have focused on cars with a proven track record in the used car sector.

Glass's Guide chief car editor Adrian Rushmore said: 'We have witnessed more aggression in terms of the negotiated buying price. This hardening of attitude was in response to customers' belief in what they had read in newspapers. The sustained downward pressure on prices has been a concern with the trade all year.' The trade's nervousness over new car prices translated into cautious buying at the lowest level, says January's Guide and, as a consequence, said Rushmore: 'Many now argue that the prices of used cars already take account of anticipated new car price reductions. The comparison of used car values would lend some credibility to this point.'

With most car makers saying huge one-off price cuts are out of the question Rushmore repeats his view that a progressive downward move in new car prices was vital to businesses - including manufacturers, leasing and rental companies, fleets and dealers - who have equity tied up in used cars. He added: 'The message from the industry is that consumer concerns over new prices are being addressed through normal market forces, and that used prices are falling in a manageable, albeit painful way. For the Commission and the Government to interfere further would only rub salt in the wound.'