A computer simulation model of the car market has been developed. The car ownership preferences of a representative group of households are represented mathematically within the model, and estimates of car prices are obtained by balancing supply and demand for used cars. The model is dynamic, and so can simulate the changes in the car market and the national stock of cars with time. It was successfully calibrated to represent the British car market in 1981 and, in a simplified way, its development over the previous decade. The model has been used to study the likely effects on the car market of a reduced number of company cars. It predicts, for example, that cars would be scrapped up to 1.8 years later and average engine capacity fall by up to 5 per cent if companies no longer bought cars for their employees. The effects of altered new car prices and running costs have also been studied. As expected, the model finds that as motoring becomes more expensive then cars tend to become smaller and be scrapped later; the magnitude of these effects is given in the report. (A)

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