STRONG sales of new and nearly new vehicles are continuing to reduce the values of older cars according to Glass’s Information Services.

The deterioration in prices for cars aged seven-14 years is being driven by the migration of customers to younger cars that have become more affordable owing to low interest rates on vehicle finance.

Consumer pressure on manufacturers to lower new car prices in recent years has also reduced the value of used cars.

John Glynn, editor of Glass's older car guide, explained: “New car price cuts forced used car prices down and, as used car buyers discovered they could afford a newer car for the same money, older car sales were hit badly. Falling prices and the continuing slump in older car sales snowballed, bringing older car prices down further.”

In addition, the growing popularity of niche vehicles such as MPVs and SUVs has impacted on the traditional role of saloon cars as family vehicles.

For example, in March 2000, Glass' s retail price for an eight-year old Vauxhall Cavalier 1.8 GL five-door saloon was £2,775. In March 2004, the same car of the same age had a value of £1,650, over 40 per cent down.

Small cars have also suffered. The value of an eight-year-old Ford Fiesta 1.1 LX five- door has fallen 28 per cent in four years.

Concepts such as the compact MPV, more efficient diesel and power steering and air-conditioning as standard on newer cars have also affected the price of older vehicles.