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Car depreciation 'worsening'

New cars are losing value at an increasingly sharp rate thanks to current economic conditions, the BBC reports.

Figures from Eurotaxglass's cited by the broadcaster have pegged the annual depreciation rate of used cars at an average of eight per cent.

This means that many car loans are being paid off to a far higher value than the vehicle is currently worth.

Analysts at Eurotaxglass's also blamed government 'green taxes' for the increasing rates: cars which cause the most pollution, such as four wheel drives and big family estates, are most vulnerable to depreciation.

The situation might also deteriorate further in future, thanks to the Budget announcement yesterday of a one-off £950 "showroom tax" for highly-emitting vehicles.

However, drivers were also given good news yesterday by chancellor of the exchequer Alistair Darling, who announced that the anticipated 2p rise to fuel duty will now be put off.

The rise, which had originally been scheduled to be put into effect next month, has now been postponed until the autumn.

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