The company says that retail demand for used cars is stronger than at any time since September last year, with research for CAP Black Book Live showing positive signs in areas such as the mood and buying activity at auctions as well as consumer retail demand on the forecourt.

It adds that dealers are still reporting difficulty in sourcing good quality used car stock for retail following the reduction in new car registrations of recent years. This may continue as increasing numbers of poor condition cars with high mileage continue returning to the market.

Derren Martin, senior editor for CAP Black Book Live, said: ‘We are seeing what we describe as a good “buzz” around the auction halls, with plenty of appetite from dealers for the best quality stock – when they can find it.

‘Some auction sales have seen conversion rates up to 20% better than during the same period last year and the dealers we speak to are generally happy with the level of retail interest they are seeing.’

However he added: ‘We keep a close watch on the market every day and there have been some signs that increased short-term rental business for some model ranges is starting to bring higher volumes into the marketplace. When that happens, prices tend to reduce but at the moment stability is the watchword in the current trade market.’