Used vehicle vendors who refuse to acknowledge the present slump in residual values and adjust their prices accordingly are threatening to stifle the market.

The warning comes from Manheim Auctions said used sales in April were disappointing. Prices fell, enthusiasm fell and buyers were cherry picking, selecting carefully what vehicles they purchased and in what volumes, it says.

Andy Shepherd, senior group auctioneer for Manheim Auctions, said: "A tough market makes life difficult and frustrating, not only for auctioneers but for vendors and buyers alike. Vendors want to sell but find it difficult financially to accept lesser bids, buyers want to buy but find it difficult to pay the prices wanted by the vendor because their retail market has declined.

"Vendors need to react to the marketplace and realign residuals. Otherwise, we see vendors re-entering stock which can be dangerous. Unsold stock declines in value on a weekly basis, eventually leading to a loss of £200-£500 pounds, even in some instances ending as a 'no bid'.

“To continue to convert a high percentage of first time entries, vendors must be prepared to accept that most residuals have fallen.

"Furthermore, re-entering vehicles not only costs the vendor more financially, in the long term it also affects the buyers attitude as they become fed-up of seeing the same vehicles on the merry-go-round. Switched on vendors will move cars quickly and take the bids.”

However, the end of April witnessed increasing conversion rates for all vendors, including manufacturers, pointing to an upturn in the market in May and into June.