The National Association of Motor Auctions (NAMA) monthly market report for October shows average values of used cars sold at auction decreased from £4,718 to £4,558, equivalent to a 4% decrease.
Values for fleet cars recorded a 6% decrease.
Year-on-year, the average price of cars at auction has increased by just 0.1% from £4,554 to £4,558.
The month-on-month price reduction is normal for this time of year.
There were signs of even more buying apprehension this month in comparison to previous years. While the economy remains fragile and consumer confidence remains low, buying intentions become increasingly unpredictable.
Dealers have not been able to price cars to achieve the customary margins because consumers are unable to pay higher prices.
This is causing dealers to evaluate the stock they have and consequently overall levels are likely to be lower than normal.
Bob Anderson, NAMA committee member, said: “The mix of cars on offer in October was biased towards lower condition grade vehicles. However, dealers were more focused on acquiring stock that required little remedial attention and could be presented to potential buyers without delay.
"Higher grade vehicles are currently not in high supply and this situation will not change for the foreseeable future.”
The fact that average auction prices for cars of all ages are virtually unchanged from last year would appear to be quite encouraging.
Unit sales by month from NAMA members recorded year-on-year increases for eight of the 10 months in 2011.
This is not necessarily reflective of a wider supply of cars, but rather that the auction companies have been successful in winning a larger proportion of the overall market.
Anderson added: “All indications are that the auction market is likely to perform to expectations for the remainder of 2011.
"We expect to see stock inventories fall steadily between now and the end of the year, with condition grade four and five cars continuing to be more difficult to sell if unrealistically priced. Trade demand is likely to ease, but competition for the best vehicles will remain high.”