The CAP Used Car Price Index has shown that second hand car values are continuing to decline, making them more affordable now than a year ago.
The figures for August show that average used car values are lower than 12 months ago, for the first time this year.
Small cars are suffering the brunt of the drop in value, falling 10% between August 2009 and August 2010.
Cap said: "Cars across all sectors have seen their values reducing since April this year, gradually wiping out the price rises that occurred during much of 2009.
"Taking the used car market as a whole, values are now on average almost 3% lower than in August 2009. It is the first time this year that average values have been lower than 12 months previously."
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