Used car prices are beginning to fall across Europe especially for diesels, according to the latest fleet index published by EurotaxGlass's.

It reports average trade values for three-year-old cars have dropped by 1.3% over the past 12 months.

Diesel values are losing their premium over petrol versions, with average residuals plummeting twice as quickly.

David Truempler, EurotaxGlass's key account director, said: “The fall in diesel values is ominous for the UK where the proportion of new diesels bought by fleets is currently rising in response to high fuel prices and new taxes on company cars.”

It is likely to result in a flood of cheap diesel models, which would benefit dealers – used car buyers tend not to demand diesels in great numbers, so a fall in price could make them more attractive.