The used car market is undergoing a market correction, and the pace of change has accelerated in May, according to experts at Cap HPI.

The month to date has seen values drop by up to 4%, depending on the sector and age. The fall equates to an average of over £350 on a one-year-old car and over £300 on a three-year-old car.

Derren Martin, head of UK valuations at Cap HPI, said: “Some mainstream cars have had between £500 and £1,000 knocked off their value this month.

“The reasons for this are a realignment of values after some unprecedented strength in the market, which resulted in increasing or stable values in 2017/18.

“Cars will naturally deflate in value, but this hit seems to be all happening over a short period.

“The market is moving quickly, and I can’t think of a time in recent years where current data will have such an impact on profitability.”

The data also shows the lower medium sector at one year is down nearly 3% during May or £400 while the super mini sector at three years is down over 3.5% in May or £275.

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