The average price of a used car has fallen during May by the biggest monthly amount since December 2014, according to Cap HPI.
The automotive data firm has reported a 3.1% fall for three-year-old 60,000 mile cars, which is also the biggest fall it has seen in May since it started collecting live data in 2012.
The May fall also follows a 2.3% drop in values in April, a significant combined drop in values.
Cap HPI head of UK valuations Derren Martin said: “We have witnessed an almost perfect storm in the last two months. The drop is due to prices increasing in 2017 and 2018, coupled with heavy supply and weakening, seasonally affected retail demand.
“It has created an unwillingness to pay previous prices, which has resulted in significant declines in a number of cases.
“Despite the larger-than-usual book drops, it is important to put this into context following the strength we witnessed last year. The market is complex at the moment, and it’s important to use real-time data to stay aligned to a rapidly evolving situation.”
In terms of vehicle segments, city cars, superminis, lower-medium cars and SUVs all saw value drops bigger than the average.
Cap HPI says upper-medium cars fared better due to lower supply and already relatively competitive prices.
Diesel car values fell by slightly more than petrol ones, and most electric car values were also down.
Martin added: “While supply levels are likely to be higher than they were last year, with prices now realigned and demand likely to pick up, it is very unlikely that prices will continue to decline at the rate witnessed over the last two months.
“Many cars now actually look reasonable value for money again, and this could lead to some relative stability.”
