Used car values in February fell by 1.7% to £7,814 on average compared to the previous month, according to the monthly BCA Pulse Report.
The fall is the third consecutive month of decline, although year on year values were up 6%.
Simon Henstock, BCA’s UK Operations Director said: “Levels of trade were steady during February, with plenty of interest in retail ready cars, but buyers were rather more wary of poorer condition vehicles.
“With a greater volume of stock expected to reach the marketplace in 2015, buyers have a lot more choice and vehicles requiring repair and refurbishment need to be sensibly valued to compete.”
Mr Henstock said with most commentators expecting a strong March for new car sales, the greater volume of used cars could impact further on residual values in the weeks ahead. The Easter break, spring Bank Holiday and General Election are also likely to soften the market he warned.