Used car values have dropped by a record 2.2% decline for July as the large executive and luxury executive cars fell out of favour with car buyers, Cap HPI has reported.

The price drop at three-year, 60,000-miles was “significantly more than the seasonal norm” of a 1% reduction during the month over the last five-years.

Derren Martin, head of UK valuations at Cap HPI, said that every price movement in the used sector so far in 2019 had been “more negative than that of the same month in 2017 and 2018”.

He added: “The largest drops in Live in July were in the large executive and luxury executive sectors, with both falling out of favour with buyers, due to a reluctance to invest in big-ticket items.

“Drops have averaged over 3% for both sectors, which are significant amounts of around £800 for large executives and over £2,000 for luxury models."

Cap HPI reported that the upper-medium sector had seen a noticeably higher drop in the value of diesel cars over the last few weeks, driven by volume and an abundance of similarly specified ex-fleet cars.

Electric vehicles (EVs), meanwhile, moved back in-line with the overall market with more acute drops at the top end.

Some EV models looked relatively expensive compared to similar petrol and diesel models, Cap HPI said, but added that Tesla models, in particular, have seen value reductions of late, not helped by some inconsistent new car pricing affecting the used market.

Martin said: "Diesel car values dropped at a slightly higher rate than petrol ones, as they have done during every month this year, but it is marginal. 

“With clean air zones appearing there could well be some regional bias on pricing going forward and wholesale vendors would do well to be mindful of this when choosing where to sell, and we have already seen the early signs of this in our retail data.

“While there are some signs of recovery, the used car market is certainly not buoyant."