The UK economy is at best struggling, and at worst may be on the verge of recession. Add that financial uncertainty to the latest increases in vehicle excise duty announced during Alistair Darling's first budget and it's easy to see why leading motor industry experts are warning of rapidly falling used car prices.

Anyone considering buying a car, whether brand new or used, should make very careful decisions about their purchase. Drivers of four wheel drive vehicles have been hammered by the latest punitive car tax rises, allegedly imposed in the name of environmental concerns. The ‘green taxes' will certainly make anyone think twice about buying a vehicle in the top emission category of band M.

It's a well-known fact that brand new cars immediately depreciate the instant you drive them off the forecourt; but following the budget, industry analysts Eurotaxglass's are adjusting their forecasts to add an additional eight per cent fall to used car prices this year.

That comes on top of research by the Alliance & Leicester which highlighted family motors as the cars that lose value most, whilst premium brand vehicles such as BMW suffer least in the depreciation stakes. According to the A & L findings family cars were worth only a third of their original value three years after purchase from brand new, whereas compact cars and 4 x 4's lost only a fraction of their value in the same period.
However, the A & L research was conducted prior to the announced increases in vehicle excise duty and now industry analysts Eurotaxglass's believe the relative immunity from depreciation that 4 x 4's have enjoyed will now be cancelled out. So, given all the gloom about depreciation it may be wise to take a long term view if you are thinking of changing your vehicle in the near future. By factoring in depreciation and re-sale values careful buyers will consider paying more for a car that will retain more of its value in the future.

It is especially important to carefully consider your purchase, especially if you are buying you vehicle using car credit. It may seem like a great deal to buy a cheap car but if it is one that depreciates quickly you may quickly owe more than the car is worth, which will certainly limit your options to economically change your vehicle in the future.

No one can predict exactly how much a car will be worth in the future, but by listening carefully to the experts you can arrive at a fairly accurate estimate; use their expertise when you are next thinking of upgrading your vehicle, and you'll be able to safeguard your investment.

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