The price of new cars rose in April for the second month running, according to a report out today, while a second survey showed most consumers still believe they are being overcharged when they buy a new car in the UK.
Figures from independent price monitor Car Price Check showed the cost of buying a car in April rose by 0.69% from March, and showed an overall year on year increase of 2.9%.
Prices are likely to continue to rise as manufacturers try to claw back some of their losses after a couple of years of low volumes of trading, said Car Price Check.
"At the start of the year, dealers and suppliers kept prices keen as they looked to sustain the record sales of 2001," said Steve Evans, chief executive of Car Price Check. "Yet, with demand showing no signs of faltering, there is less pressure to compete by slashing prices month on month."
A report from market researchers Montel found that 56% of motorists questioned feel they are still being "ripped off" by high prices on new cars - this was up from 55% two years ago.
"Although some car prices have fallen, it seems that consumer perceptions are slow to change, or that they have not fallen enough," said Dominique Allport, retail consultant at Mintel.
A report from the Competition Commission in 2000 found UK buyers were paying between 10% and 12% more than buyers in Europe, despite the fact that two-thirds of cars sold here are imported.
The government has tried a number of initiatives to drive down car prices in this country, and in January this year the European Commission proposed that dealers should be able to sell more than one brand of car, thereby opening up the market.
It also wanted to make it easier for consumers to buy cars from abroad, and proposed to withdraw the restriction on importers buying more than 10% of their vehicles from the same dealer.
The Mintel report found that 42% of people would buy an imported new car, and 32% a used car, if it would save them money.
According to Car Price Check, it was fleet favourites like the Ford Mondeo, Renault Laguna and Honda Accord which pushed overall market prices up.
"Buyers are still being offered reasonably good deals in the main, but the conditions are ideal for a cut in the size of those discounts as dealers look for improved profitability after a difficult few years," said Mr Evans.
