Latest figures from the A&L Car Price Index indicate that new car prices fell by 1.5% between July 2002 and July 2003. The same data shows the rate of new car price falls has steadily increased over the past four months – April saw a 0.6% drop, May a 0.8% fall and June a 1.2% fall. This contrasts with the HICP index for new cars which is up 0.7% year on year and has been rising from a 0.0% year on year in April.

On the month-to-month measure, new car prices were static between June and July, registering almost no change. This follows on from the 0.9% fall between May and June, which was the largest fall on the month-to-month measure in any single month since February 2002.

Nearly new prices, which reached their lowest level in the lifetime of the A&L index last month, firmed considerably during July but are still 3.8% down on a year ago. This is however, notes the A&L, substantially less than the 11.4% annual fall in June and the 9.0 fall recorded in May.

Nearly new prices rose by 5.2% between June and July alone. This is the first month on month rise in 2003 in nearly new prices and is in contrast to the 2.5% fall seen between May and June. Used car prices indexed by the Alliance & Leicester, similarly at their lowest ever level last month, have firmed during the past month but are still some way down year on year. They are now down 7.5% on July 2002. In June they were 13.5% down year on year. The fall brings the year on year price change closer into line with the HICP estimate for used cars, which recorded a 3.8% year on year decline in July.

On the month to month measure, the A&L index shows used car prices rose by 2.3% between June and July having seen falls of 2.8% and 1.3% in the preceding two months.