According to Glass's Information Services, sales of most new luxury saloons have fallen back or remained static, losing out to large prestige 4x4s and large prestige saloons.

"The launch of several new luxury models, the widespread availability of discounts and incentives, and more new diesel options have prevented further significant falls in registrations, but this still counts as a poor performance against a backdrop of record year-on-year sales across the UK car market as a whole," comments Richard Crosthwaite, Specialist Car Editor at Glass's Information Services.

Glass's says falling demand has led to steady reductions in luxury car values over recent years, to the point where they now represent excellent value for money on the used market, particularly for those who opt for a petrol model. Crosthwaite adds, "It now costs no more to buy a new diesel luxury car than a petrol equivalent, but the value of the former as a used car is at least £1,000 more after one year. The residual value benefit remains at similar levels for two- and three-year-old examples."

Glass's is clear about why luxury cars have been falling out of favour with new car buyers. "'Downsizing' is a trend that has become prevalent in the car industry over the past decade," says Crosthwaite. "One significant result has been that many of those able to invest in a large luxury car have opted for 'lifestyle-oriented' alternatives, or models that are cheaper to run. What looks likely in the future is that the traditional luxury car will continue to fall in popularity and values will continue to ease, albeit more gently than of late."