New car prices are still falling - but the ever-popular lower medium sector enjoyed the biggest price reductions in March.

There was more good news for the owners of Astra and Focus-sized vehicles as the secondhand value of lower medium cars actually increased.

Strong consumer demand in the used market has driven a price recovery of 3.1% whilst manufacturers are cutting new price lists in the attempt to gain market share in this highly competitive sector.

“Lower medium vehicles are vital to both the new and used car markets,” said Cap senior economist Ramesh Notra.

“The Ford Focus was the best selling new car last year, according to registration figures from the Society of Motor Manufacturers and Traders.

“Their popularity is is partly due to a trend for downsizing. However these cars have always been popular in the used market because they meet customer needs for good value and practicality.”

Across all sectors, new car prices continued to fall at a similar rate as in January and February. In March they declined by 6.2 per cent year on year.

Buyers of MPVs again saw little benefit, with the lowest price falls of all sectors for the fifth consecutive month.

Their new prices fell by just 0.6 per cent, whilst their secondhand values fell by 7.5 per cent.