The prices of used cars in the UK - a popular market among the Maltese - is going up sharply, according to recent research. The usual 15%-a-year depreciation in used car prices has been reversed.

CAP Motor Research said the price of an average family car has risen by £600 so far this year.

For Maltese buyers, the situation has deteriorated further because Sterling has been strengthening against the euro.

The increase in second hand car prices has been blamed on the UK government's car scrappage scheme and the recession, which is delaying the purchase of company car fleets.

This is the first time that second hand car prices have actually risen instead of fallen.

Month-by-month, prices have been rising by some 3.5%.

However observers expect prices to fall again next year as the maintenance costs of rental and fleet cars increase and they are put on the market.

In Malta, monthly registrations of used cars originating from the European Union (mostly from the UK) have almost quadrupled since January when the new registration tax regime came into force.

Those imports, and imports of used cars from other countries such as Japan, have caused new cars purchased locally to lose up to half their value in just two years.

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