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Fall in used car prices predicted

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In a move that could have serious consequences for the car insurance market, industry experts say that the average price of a used vehicle has peaked and will fall from October onwards.

Valuation experts Glass's says increases in the sector had been driven by a shortage of nearly-new models on the market - a situation set to change after the introduction of the new 59-registration number plates.

Although the number of used vehicles is expected to be small compared with previous years, the company predicts that there will be enough to affect the price of cars on the forecourt.

"The improvement in prices this year was largely due to the much lower level of used-car supply," said Adrian Rushmore, managing editor at Glass's.

"It is apparent that the correction is complete - in other words, the trade price of a car, plus a dealer margin, now equals the retail price that customers are willing to pay. However, there are already signs that some dealers are displaying vehicles with smaller margins in order to ensure that would-be buyers are not discouraged by price."

© Press Association 2009