The values of many used cars particularly late plate models are being hit hard as a direct result of the discounts, offers and incentives currently being applied to support the sale of new vehicles.

Industry analysts Glass's Information Services says one-year-old cars fell seven per cent more during 2002 than they did during 2001.

Three-year-old cars have also suffered, but the additional fall in value was a more modest four per cent over the same period.

"Many vehicle manufacturers and distributors are extending the duration of offers on their new models in an attempt to preserve revenues and market share in the face of falling sales.

"But the inevitable knock-on effect is to make their used cars look increasingly expensive," comments Adrian Rushmore, managing editor at Glass's Information Services.

With manufacturers adding extra equipment to new vehicles to attract potential buyers, the used car market is also demanding higher specifications, warns Glass's.

"The additional equipment that is being offered for little or no extra money is raising the standard for what is now expected on a second-hand vehicle," confirms Rushmore.

"A common approach is for manufacturers to target their incentives on a specific model in the range, creating a Limited Edition which may offer up to £1,000 of additional equipment at little or no additional cost."

But some cars are less susceptible to these sudden, market-driven falls in value.

"Larger MPVs, estates, automatics, diesels, and many cars from the prestige brands generally experience a more steady market with more consistent prices," Rushmore added.