Although used car prices improved from a year-on-year fall of 9.8% in April, vehicles were still fetching an average of 7.5% less in May for disposals than they were at the same time last year.
But there could be further misery to come, with new car prices still falling year on year, by an average of 2.7% in May.
Prices for new superminis fell most sharply, by 7.3%, while small car prices were down 5.8%. The only vehicles that have shown a new price increase are luxury cars, which are up 3.8%.
For three-year-old cars, the biggest price fall was in the upper-medium sector, down 12.1%, while superminis were down 7.5% and executive cars were down 8.9%. Luxury car prices fell 5% and MPVs 4.5%.
Andy Bayes, of Alliance and Leicester, said: 'UK consumers are continuing to reap the rewards of increasingly more affordable cars with the low prices of 2001 having been bettered in 2002.'
Douglas McWilliams, of the Centre for Economics and Business Research, said: 'Despite some signs of weakening in retail markets generally in May, the UK car market remained relatively buoyant.
'The continued growth in sales of new cars has allowed dealers to maintain the current prices.'
|Alliance and Leicester car price index|
|Category||News cars||Used cars|