Massive falls in depreciation of large luxury cars is wiping tens of thousands of pounds off their value.

According to the latest research, a one-year-old Mercedes-Benz S320 CDI had an average value of £43,350 this time last year, but now an identical model of the same age is worth £33,250, representing an additional £10,100 - or 23% - fall in value.

The rapid fall in values continues as the vehicle ages.

According to the latest figures from Manheim, a four-year-old executive car was worth 37% of its list price this time last year.

Now it is worth just 26% meaning a four-year-old S-Class that has covered just 70,000 miles is achieving less than £7,850 at auction.

Comparing one-year-old examples of the segment’s best-selling diesel models in November 2007 with an identical group of the same age in November 2008, EurotaxGlass’s uncovered an additional average fall in value of £7,263, equivalent to a further 21% off the trade-in price.

“A number of factors have combined to ravage the trade values of large luxury saloons and coupes,” said Richard Crosthwaite, prestige car editor at EurotaxGlass’s.

“The economy has certainly made its mark, accelerating the trend where fleet buyers and consumers are gravitating towards smaller, cleaner and more fuel-efficient alternatives.

"Now seems to be the ideal time for prospective used car buyers to consider picking up a former fat cat’s executive express.”

Meanwhile, senior executives still demanding they have a new large car without the environmental impact are being offered a new zero-emission Liberty Electric Range Rover.

The car qualifies for the same tax advantages and incentives that are encouraging drivers into small non-polluting city cars.

Compared to similar models, the Liberty saves over £8,500 a year of Benefit-in-Kind tax.

It also qualifies for exemption from vehicle excise duty, and parking and congestion charges in London.

Corporate ownership also entitles company finance directors, or leasing companies, to write-off 100% of the purchase price against tax in the first year.

In addition companies save around £6,000 a year in National Insurance contributions (assuming 12.8% taxable benefit), and employee business and private fuel costs.

Liberty Electric Cars has also launched the Zero Emission Vehicle Foundation.

The Foundation is accelerating the introduction of zero emission technologies by raising awareness, and attracting funds and investment into the sector.