The average price of used cars sold at auction fell for the third consecutive month in August, according to new data from BCA.

The auction firm said the average fell by 2.5% compared with July, to £7,669. However, this was an improvement on the 6.9% decline seen from June to July.

According to BCA, demand has remained reasonably consistent, and sold car volumes in August were higher than those seen in any month since March.

The company said a shortage of desirable three to four-year-old cars continued to be a significant factor impacting the market, and that as a result competition remained strong for the best examples.

BCA COO Stuart Pearson said: “Buyer feedback suggests that the retail landscape remains challenging and often inconsistent, not untypical at this time of year, but no doubt exacerbated by the continuing tough economic conditions generally. As a result, it is therefore no surprise that tactical campaigns to stimulate footfall can apply pressure within the wholesale market and therefore we’ve seen prices moving.

“The well documented shortage of three to four-year-old product continues to drive a significant focus on the best graded stock that can be retailed quickly, with many of these vehicles reaching values well in excess of expectations.  

“Conversely, the poorer graded vehicles have needed very close pricing attention with a clear focus on the remarketing basics required to find them a new home the first time they are offered for sale.”

Pearson said that all things considered, the market felt like it was in reasonably good shape for the months ahead.

He said: “Stock levels are lifting and there is an optimism that consumers will become more engaged as inflation falls. The trade is well practiced at reacting quickly when they sense opportunity and, with some signs of improvement in the broader economy, this could be just around the corner.”