Used car values dropped by 0.9% during August as higher disposal volumes and more selective buying put greater pressure on the wholesale market, but battery electric vehicles (BEVs) bucked the trend.

At the critical three-year, 60,000-mile benchmark, average vehicle values fell by £195, according to the latest analysis from Solera Cap HPI.

The 0.9% drop heading into September compares with a fall of just 0.1% during the same period last year, when limited supply was being chased by stronger demand.

Disposal volumes for three- to four-year-old cars have been running above last year’s levels in recent weeks, shifting the balance between supply and demand, although clean, well-presented stock continues to attract buyers.

Chris Plumb, head of current car valuations at Solera Cap HPI, said: “We’ve seen more three- to four-year-old vehicles coming through disposal channels than we did at the same point last year, and that has inevitably put some pressure on values. Buyers have more choice and are being selective about what they purchase.”

The figures underline the growing divide between younger retail-ready vehicles and older, higher-mileage stock. One-year-old cars at 10,000 miles fell by an average of 0.5%, compared with a 1.6% reduction for five-year-old vehicles at 80,000 miles and 2.7% for 10-year-old cars at 100,000 miles. Cars worth less than £5,000 recorded an average fall of 3.4%.

Diesel was the weakest-performing fuel type at three years old for the fourth consecutive month, falling 1.5%. Petrol declined 1%, plug-in hybrids were down 0.9%, and hybrids slipped just 0.1%.

BEVs bucked the wider market with a 0.1% increase. Values strengthened across several important retail price bands, rising 0.4% for BEVs priced between £5,000 and £10,000, 0.3% between £10,000 and £15,000, 0.2% between £15,000 and £20,000 and 0.4% between £20,000 and £30,000.

Plumb said: “Used electric vehicles continue to perform well where the price is right. The strongest demand is concentrated in the core retail price bands, where affordability is bringing BEVs within reach of a much wider group of buyers.

“The pressure remains at the older end of the market, particularly for higher-mileage ICE vehicles. Preparation costs matter more at these price points, and buyers have little appetite for taking on cars where the numbers don’t work.”

Among three-year-old BEVs recording positive movements during August were the Polestar 2, up 3.3% or £630, Renault Zoe, up 3.0% or £215, Volkswagen ID.3, up 3.0% or £350, Peugeot 208, up 3.0% or £250, and Kia e-Niro, up 2.1% or £250.

Despite the fall in overall used car values, Plumb caveated that demand has not disappeared.

“Clean, well-presented cars that are priced correctly are still attracting plenty of interest. Conditions also became more settled as August progressed, with some remarketers reporting lower stock levels and improved conversions during the second half of the month.

Looking ahead, Solera Cap HPI expects September to bring a degree of stability before trade-in, fleet and rental volumes increase later in the year. Excluding the Covid-affected years of 2020 and 2021, the average movement from September into October at the three-year point has been a decline of just 0.1% since 2012. Last year’s movement was a 0.2% increase.

Plumb added: “September has traditionally been a relatively stable month, but supply will build as plate-change trade-ins and fleet and rental returns start coming back into the market. The three-year-old market has the potential to remain reasonably close to normal seasonal patterns, particularly for clean, desirable stock. The bigger risk remains with older vehicles, where supply and demand are still out of balance. With volumes likely to increase as we move towards October, values at that end of the market could remain under pressure.”