Stock funding provider Next Gear Capital has said dealers’ used car buyers are becoming increasingly “discerning” over the condition, service history and specification in recent months.

According to a white paper published by the Cox Automotive-owned company, Next Gear Capital said used car prices and conversion levels are being influenced by condition/pre-sale preparation in the remarketing cycle with  trade buyers favouring stock with known or no preparation costs and which is likely to be on stock for less days.

The report said: “Buyers appear willing to pay a price premium for such stock.

“This is in stark change to recent years and vendors need to be alert to the value of preparing disposals for sale.”

According to Next Gear Capital’s data, the top-selling used car segments in 2015 have been supermini, C-segment and dual purpose vehicles.

The report said: “Volume growth in all three segments reflects a shift in buying habits, with the supermini and dual Purpose segments enjoying the greatest gains.

“It is worth noting that there has been strong relative growth in demand for alternatively fueled vehicles over recent months, sales rose 70.9% in June. However, overall volumes remain modest.”

The main sector losers have been SUVs, due to large volumes in the market.

CAP report that the Nissan Juke and Skoda Yeti saw values drop in July due to high volumes in this ever-growing SUV sector – which has seen a 125% increase in used car sold volumes over the last five years. The report said: “It seems prices are likely to remain under pressure for the foreseeable future.”

David Mercer, Next Gear Capital managing director, said: “More customers are feeling confident and more are actively looking to change car.

“This is the clear picture from a range of research sources that we have used to compile this report. The good news is that more stock is coming to market as the sustained growth in new car sales starts to feed through to the market.

“While this supply is creating some downward pressure on used values, we must recognise that the number of cars sold through auction increased year on year by 12.2%.

“As what might be considered to be the traditional remarketing cycle finally returns, I think it is important to reflect that this new marketplace is nothing like the pre credit crunch market.

“Regulation, technology and a more informed consumer, who turns up often knowing more about their selected car then the sales executive, mean things have changed forever. For us, this change signals opportunity.”