Cap has defended itself against criticism of over-estimating the state of the used car market.

A spokesman for the residual vehicle date provider said if its Black Book was to publish even lower anticipated values, based on expectations rather than current information, it would “be rightly held accountable for damaging confidence or leading the market”.

The response came as auction website Auction4Cars slated Cap for over-valuations that do not reflect continued falls in used car values.

For the second month in succession, figures from Auction4Cars show average used car values falling again, to £2754 in May (equivalent to an 8% drop since January). The website believes Cap should review its valuations further, with a fall of 10% needed to bring it in line with auction prices (rather than the 4% published in June’s Black Book).

Neil Prescott, group disposal manager at Motorpoint, Auction4Cars’s parent company, said: “While there will always be an element of lag with Cap, prices are still as much as 10% adrift, and we believe this really needs to be addressed at the earliest opportunity.”

Cap admitted Auction4Cars had a valid point “insofar as the market tends to focus only on the ‘Cap Clean’ value, even in relation to cars which do not meet the Cap Clean criteria”.

Cap continued:?”There is a major issue in the current market around condition, with a mass of evidence indicating that a large proportion of the cars available do not meet that criteria at present. There has also been a shift among buyers who until relatively recently were prepared to pay clean prices for cars which in truth needed investment in reconditioning, thanks to the shortage of supply.

“Now they are more rigorously taking into account such costs because supply is more plentiful. Therefore, by definition, average market values are inevitably failing to reach Cap Clean.”

Cap added: “There does tend to be an element of lag in a monthly guide when the market is moving quickly, so that the book can be overtaken by events. Indeed, our analysis of the first week in June indicates that prices have continued to fall rapidly since publication of the latest edition of Black Book.”

The company said it is always adjusting values based on hard evidence from the market along with expert feedback from many operators. It is also having useful discussions with Auction4Cars whose “feedback is proving invaluable during a time of severe market instability”.