Used car prices are set to stabilise over the first three months of the year, before taking a battering as lower new car prices stimulate the new market and lead to an influx of part-exchange vehicles, according to Glass's Guide.

It also forecasts that the imminent General Election, widely predicted to be in May, will also be a low point for used car prices, as uncertainty surrounding the next government deters retail buyers.

Adrian Rushmore, Glass's chief editor, expects a “modest” post election recovery for used cars until the new car registration system is introduced in September.

Trading conditions in the final quarter of 2001 are expected to be similar to last year. “The best news we can impart is that used car prices are expected to be less unstable than they have been for the last two and a half years,” said Mr Rushmore.