Used car values have experienced their most severe May decline since Cap HPI’s records began in 2012 and the heaviest monthly drop since December 2014.

Values fell by 3.1% on average in May at the three-year, 60,000-mile point in a decline which followed a 2.3% drop during April, representing what Cap HPI described as “a significant realignment in used car values”.

Derren Martin, head of UK valuations at Cap HPI, said: “Every model and generation is analysed on its own merits, and the vast majority of cars were not immune to substantial reductions.

“We have witnessed an almost perfect storm in the last two months. The drop is due to prices increasing in 2017 and 2018, coupled with heavy supply and weakening, seasonally affected retail demand.”

Martin said that the combination of market forces had created a situation where there was now “an unwillingness to pay previous prices, which has resulted in significant declines in a number of cases”.

He added, however, that despite the larger than usual book drops, it was important to put this into context following the strength we witnessed last year, stating: “The market is complex at the moment, and it’s important to use real-time data to stay aligned to a rapidly evolving situation.”

Cap HPI said that the mainstream sectors of city car, supermini, MPV, lower medium and SUV had all experienced value drops in excess of the average, in percentage terms.

Upper medium fared slightly better due to lower supply and already relatively competitive prices in this sector.

Even convertibles dropped in value at a time of the year when they are usually increasing, it said.

Diesel cars dropped in value by slightly more than their petrol counterparts, and most electric vehicles fell in value.

However, the Citroen C-Zero bucked the trend and values rose.

Martin said: “While supply levels are likely to be higher than they were last year, with prices now realigned and demand likely to pick up, it is very unlikely that prices will continue to decline at the rate witnessed over the last two months.

“Many cars now actually look reasonable value for money again, and this could lead to some relative stability.”

Looking to the month ahead, Cap HPI said that the average drop in Live valuations during June over the last five-years has been 1.1%, at the three-years, 60,000-mile point, with the biggest falls during that time being 1.4% in 2015 and 2017.