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Average used car values fell by 4.4% month-on-month in December, according to BCA.
The auction company said that following a peak in March, average values had declined by over 22%, with nearly half of this realignment taking place during the past three months.
It said broader economic factors had impacted on retail activity, and that new car availability and manufacturer new car incentives had become more prevalent.
In addition, BCA said there was a decline in stock mix, with a shortage of three to four-year-old vehicles being overcompensated by larger volumes of older, lower grade vehicles entering the market.
BCA COO Stuart Pearson said: "Feedback from our customers highlights that the last quarter of 2023 continued to be extremely testing, with many factors playing into the retail slowdown experienced.
"Buyers were caught in a dilemma of whether they should 'stick or twist', however a number actively took advantage of significantly lower prices in December to refresh their forecourts and have been realigning their existing stock on a weekly and often daily basis.
"While the market has experienced continued pressure on used car values over recent months, it is worth noting that values have now shifted to a place not too far away from those seen in pre-pandemic times.
"Considering that the UK economy has been under significant stress during 2023 with high inflation, rising interest rates and a cost-of-living crisis, the fact that a number of factors appear to be peaking could help to support an uptick in retail activity and thus drive greater stability for used vehicles prices."
Pearson added that the first week of 2024 had seen a 'fairly significant' uplift in activity across most sectors, with the potential for January to be a far more stable month for the market.
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