USED car sales continue to outpace new car volumes amid increased economic uncertainty at giant dealership Pendragon.

The owner of the Evans Halshaw and Stratstone car dealerships said used car volumes were up 18% in the three months to September 30, while new car sales fell at Stratstone and Evans Halshaw by 10.3% and 10.8% respectively.

But the company, which bought Wearside dealership chain Vardy for £506m in 2006, warned its used car profit margins were squeezed in July and August and were down compared to the same period last year as it cut prices on used cars.

After-sales, such as its vehicle check programme, which offers the highest profit margins for Pendragon, saw turnover drop by 2% in the period, but profit margins increased.

New car sales were offered some support from the recently-launched Range Rover Evoque and a new Porsche 911 model.

Pendragon, which did not give overall group sales figures, said its underlying trading performance was in line with expectations.

The group said it expects a stronger performance from its premium ranges, which are sold through Stratstone, and include top-of-the-range marques such as Aston Martin, BMW and Maserati.