THE cost of new compact MPVs rose sharply during July, but residual values for the sector are declining.

The list price of new compact MPVs rose on average by 3.1% year-on-year, a faster rate than any other new car sector and way above the average market rise of 1.7%.

Over recent months, models in the Ford Focus C-MAX and Renault Scenic ranges increased by £200 and some Vauxhall Zafiras rose in price by up to £400 as the new model was launched. EurotaxGlass’s, which compiled the figures in its monthly New Car Market Trends report, says the average compact MPV list price will also have been affected by the arrival of the new Mazda5. Second-hand compact MPVs seem to be losing their value slightly. During the second quarter of 2005, the average RV of a three-year-old car fell 4.8% (£275), compared to 4.15% for the whole used car market.

Alan Cole, editorial consultant for Glass’s Market Intelligence Service, said the higher rate of depreciation reflected the greater number of compact MPVs now available in the used car market.

He said: ‘Further list price rises look likely across many vehicle sectors, largely as a result of continued increases in manufacturing costs.

‘We are now seeing the leading steel providers abandon their traditional three-year contracts with carmakers in favour of shorter-term agreements. This will make it much harder for the manufacturers to accurately predict future production costs and, despite weak consumer demand, they may have to respond by introducing higher prices.’