Buyers' market for used cars as prices fall• Used car prices drop £120 in 2011
• More great value used buys
• Mazda MX-5 among biggest used bargains

Car buyers continue to downsize from larger cars to smaller models as the spiralling cost of motoring bites, leaving the market awash with great value used cars for sale.

Prices for models like the Mazda MX-5 have fallen sharply as buyers become more pragmatic in their choice of model, leaving the market awash with bargains.

Auto Trader’s new quarterly Price Index found a clear trend in buyers downsizing to smaller, more fuel-efficient cars and multi-car households are moving back to single-car ownership.

Average asking prices for large family cars such as the Peugeot 607 and Citroen C6 dropped by 26 per cent between April and June 2011 versus the same period in 2010.

Conversely, average asking prices for used small cars have remained relatively resilient which shows continued demand for models which are cheaper to run.

Auto Trader’s Price Index, which tracks prices advertised of around 350,000 used cars for sale on every day, also found the average cost of used cars has fallen by more than £120 in a year.

Despite the heatwave earlier this year, demand for convertibles and sports cars has fallen across the board. In April last year, the average asking price for the most popular sports car advertised on Auto Trader – a Mazda MX-5 between 7 and 10 years old – was £5,885, but this dropped to £4,802 in April this year; a reduction of 18.5 per cent.

Among more expensive car types, only 4×4s and luxury saloons held their value, with average prices dropping by around £1,000 to £21,136.

Prices continue to vary by region. The average asking price of a used car is lowest in the North East, at £8,220, while the highest is in Northern Ireland at £10,022.

But it’s not simply the case the further north buyers travel, the cheaper the car. In Scotland, the average price for a Ford Mondeo was £8,536 against £5,755 in the South West.

Prices in London have fallen the furthest, with prices slumping by £603 from £10,247 to £9,655 – a drop of 10.4 per cent.

Unsurprisingly given reduced demand forcing prices down, buyers are taking longer to decide – cars are advertised for a week longer than a year ago as cautious motorists consider their options more carefully.

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By Stuart Milne, Used Car Editor