Following two months of record price rises in the used car market values are now stabilising, according to CAP Black Book, the benchmark trade guide to used car pricing.

It marks the apparent end of a year of extreme volatility, beginning after Easter last year, with the sharpest sustained downturn in memory and switching to an unprecedented upturn from January to April this year.

It means used car trade prices have clawed back some of the value lost during the downturn, taking them back to November 2008 levels.

One of the main drivers for stronger used values this year has been a shortage of used car stock, caused by a combination of few part-exchanges due to the slump in new car sales, lower production leading to fewer late plate cars and the extension of some leasing contracts keeping fleet cars out of the market. More volume is, however, expected to enter the market during the next few weeks as confidence among disposers continues to grow.

Many dealerships and dealer groups were reporting stock levels typically in the region of 30 to 50 per cent lower than they would prefer during April. As well as the frequently reported general shortage of cars in the open marketplace, dealer stockturn has also seen considerable improvements, typically reducing from 90 to 45 days.