Used car values fell by 1% in August – the smallest drop since March, according to data firm Cap HPI.

It said that while the drop, recorded by its Live values product, was still the biggest seen in August since 2011, it suggests that the market is stabilising after a tumultuous few months.

Head of UK valuations Derren Martin said: “Except for January, each month this year has seen a drop in excess of the same month in the previous three years. “The used car market pricing realignment has been ongoing since the end of 2018 and accelerated from Easter onwards.

“Our Live values data points to a more stable period ahead as demand and values are more closely aligned.”

Cap HPI’s data showed that supermini values were the most resilient in August, falling by 0.2% at the three year, 60,000 mile point, meaning an average fall of less than £10, with the market having seen increasing demand for smaller petrol cars.

Upper-medium cars were the worst performing mainstream sector, dropping by 1.6%, while SUVs were also down by 1%.

Diesel car values dropped by more than their petrol counterparts, by 1.1% compared with 0.8%, which is in line with the trend so far this year.

Martin said: “Diesel values are not dropping off a cliff, but they are under more pressure than they were last year and more than petrol cars.

“The values of electric vehicles remain a mixed bag. Values for both the Hyundai Kona Electric and Kia E-Niro have risen to reflect the limited available volumes in the used market and extended lead times when ordering from new. 

“Of the volume models, the older Nissan Leaf continues to be under pressure in the wholesale market, as the choice remains plentiful, plus the newer model is more popular due to the additional battery capacity.”