An expert has warned that the used-car market needs a "sustained period of stability" if it is to recover in the long term.
Mike Pilkington, managing director of Manheim auctions and remarketing, believes that used-car prices will probably remain at their current low levels for the foreseeable future.
He said: "We are certainly not expecting a significant pick up in used car activity at the beginning of 2009, which is often the case in the first quarter of the year. The market is extremely fragile presently and needs to be supported by the easing of wholesale and retail credit restrictions, before we will see any material signs of recovery."
According to Manheim, overall average sale prices fell by a further 3.1 per cent month-on-month to £5720 [£5,720] in December.
There has also been a considerable fall in the proportion of original price retained. Last January a car with an average of 37 months and 44,400 miles on the clock retained 41 per cent of its value. Yet by December a car averaging 39 months and 42,100 miles could only retain 33 per cent of its original price.
But there is some hope for the future. The average values of certain executive and compact executive models with larger engines actually rose by between two per cent and six per cent.
Manheim believes that this could be market recognition of what good value these vehicles now offer "having suffered greater depreciation this year than some of the other more economical vehicle segments".
Written by Carrie Noyer