UK car prices 'still too high'

The majority of British car buyers still believe they are being over-charged when they buy a new car, according to a survey by retail research firm Mintel.

Over the last two years, the price of cars in Britain has been the subject of inquiries by UK fair trade regulators and the European Commission.

In a survey of 1,500 motorists, researchers found the proportion of those who felt they had been asked to over-pay was almost unchanged from two years ago.

At that time, 55% of motorists felt "ripped off" but since then this has risen to 56%.

Lower or not?

"Although some car prices have fallen it seems that consumer perceptions are slow to change or they haven't changed enough," said Mintel consultant Dominique Allport.

But the Consumer Association maintained that prices are still too high. "The government has laid down orders to reduce car prices by 10% and manufacturers have refused to do this," a spokeswoman for the Association said.

In 2000, the UK's Competition Commission found motorists were paying between 10% and 12% more to buy a new car than drivers in the rest of Europe - even though two-thirds of cars sold in Britain were imported.

It proposed changes to the relationship between dealers and manufacturers.

In February, the European Commission also announced a shake up of the car industry, designed to do away with big price differences between member countries.

It proposed to abolish the car industry's exemption from European competition law - known as the block exemption - which has allowed a rigid network of national or regional dealers, selected by car manufacturers, to flourish.

The Mintel survey found 63% of men felt cars were overpriced, compared to 58% in 2000.