The latest Consumer Price Index shows prices for used cars dropped 8% in the three months to September.
The CPI also shows prices for all cars fell 5%.
Dealers say sales volumes are down.
Palmerston North dealer Bruce Robertson says prices in the used car sector are the lowest they have been for at least a year.
He says dealers have cut prices to entice buyers, but many are not motivated to buy at the moment.
Another dealer says sales are down 40% from the last quarter.
Car sales are down in Australia also. New car sales have fallen there for the eighth consecutive month.
The Australian Bureau of Statistics says September sales are down 1.7% on the previous month.
The ABC reports the largest decreases were in the ACT and Queensland.
