Car buyers looking for New Year bargains could be disappointed, with price cuts likely to be few and far between in 2003, it was predicted today.

Reductions on the price of new cars this year were unlikely to match those of 2002, said monitoring company CarPriceCheck. After four consecutive months of major cuts, the average cost of a new car rose 0.08% in December 2002 compared with November 2002, the company said.

But the cost of buying a discounted imported car fell by 1.19% last month compared with November 2002, while cars bought on the internet were 0.95% cheaper.

Last month did see some discounts of up to 21% off some Ford, Rover, Volkswagen and Citroens. But CarPriceCheck chief executive Steve Evans said: "Established franchised dealers have been falling by the wayside for the past few months, and more will certainly follow. It's a really tough market at the moment."

A survey published in the summer by the European commission showed that Britain remains the most expensive place in the EU to buy cars. The abolition of "block exemption", a rule which allowed for exclusive car dealerships and distributorships, in October last year is supposed to have driven prices down as showrooms are now allowed to offer a number of brands under one roof. However, CarPriceCheck said it would be revising its prediction that the effects of this change would be seen as early as February this year.

"With tighter margins and falling manufacturer bonuses for dealers, prices are unlikely to fall dramatically in 2003. Generally speaking we won't see the level of cuts witnessed during the second half of 2002," said Mr Evans.