The first quarter of 2007 saw off-roaders and other large luxury vehicles decrease in value compared with the same period last year. Figures from analysts Cap showed 4x4s were typically worth an average 19.1 per cent less than they were a year ago. The downward trend is in contrast to the overall market where used car prices have risen year-on-year compared with the first quarter of 2006.

The weakening of SUV prices has prompted claims that it is being driven by increased fuel costs and other factors such as congestion charging. However, Cap argued that higher running costs were playing only a minor role compared to the issue of supply and demand. “As volume increases used values inevitably adjust downward as the old image of exclusivity is eroded,” said Jeff Knight, Cap forecast manager. “Increased choice makes competition to sell used examples more fierce.” Knight also claimed that the latest 4x4 penalty increase announced in this week's budget would not lead to a meltdown in used 4x4 prices but older vehicles would be affected by the increase.