Used car values fell by 1.9% or £420 at the three-year, 60,000-mile point in September, according to cap hip.
It is the largest drop in the month since 2008 when values dropped by 4.1% as the financial crisis affected the market.
September is generally a positive one for cap live figures; since 2016, each September has been either level or seen a small increase in values, apart from the outlier of 2021, when values went up by 5.9%.
Derren Martin, director of valuations at cap hpi, said: “It is important to put this month’s data into context.
“Used car values currently remain some 25-30% above where they were before those extraordinary increases in 2021.
“The downward movements now being experienced are a relatively gentle realignment, not a crash, and they are no longer increasing in severity – value drops have been consistent for the last three months now.”
Values at the one-year age point dropped by 1.6% in the month, equivalent to c.£575, whilst older cars dropped by similar percentages, 1.8% at five years old and 2.1% at 10-years old, equivalent to -£250 and -£115 respectively.
Martin concluded said he expected that October will see higher volumes hitting the wholesale market, as fleet returns and part-exchanges become more plentiful from September registration activity.
“There is little reason to predict that consumer demand will improve, although the recent Bank of England announcement not to increase interest rates will not hurt and is welcomed across the industry.
It is likely, however, that supply will outweigh demand, and with used values still high, on average, further pressure on them is likely. An average reduction similar to that of the last three months would not be a surprise and, indeed, is widely expected. The averages never paint the whole picture, and in a falling market, cap live’s daily movements are an essential tool to managing stock, as well as buying and selling.”