British car buyers continue to pay up to twice as much as their continental counterparts for the same vehicles despite industry claims to have substantially cut retail prices in the past six months.
In a damning assessment of Britain's retail car market, the European commission found that Britain remains the most expensive country in Europe to buy a new car by a huge margin for almost all the 71 models it examined.
This comes despite a series of high profile campaigns from the government, the Consumers' Association and the competition commission to bring down prices and is certain to pile further pressure on the car industry to fulfill its promises.
The report revealed for example that a new Mazda 323 cost £11,106 before tax last November in Britain compared to a pre-tax price of £5,307 in Denmark or £6,659 in the Netherlands. That means that the pre-tax price in Britain was 99.3% more than in Denmark.
Brussels found gaping price disparities right across the board for a range of popular models.
The Renault Laguna at £11,626 was almost 96% dearer in Britain than in Denmark and could be bought for £8,335 in Spain or for £6,114 in Finland. A Nissan Almera was priced at £5,787 in Spain compared to almost £9,000 in Britain.
Brussels noted that five manufacturers - Citroen, Mercedes-Benz, Vauxhall, Volvo and Volkswagen - have reduced their British prices by between 5% and 7% since last May, but this had made only a small impact on price differences.
"The price level in the United Kingdom, where there is no extra tax on car purchase, remains very high, despite the slight depreciation of the British pound and the fact that prices in euros for 23 models sold in the UK have diminished by more than 10 percentage points," the commission said in a statement.
It noted that many British consumers continue to buy their cars on the continent because of the big price gap but said that it still received "many complaints" from British bargain hunters who ran into all kinds of problems when attempting to purchase cars abroad.
Unreasonable supplements for right hand drive models and long delivery times were the two most common complaints.
The commission said research had shown that right-hand drive supplements were generally lower for Japanese manufacturers but highest for vehicles produced by the VW group which also includes Audi and Seat. Countries where car prices are lowest, it said, are Finland, Spain, the Netherlands and Denmark.
The Society of Motor Manufacturers and Traders argued yesterday that varying tax regimes throughout the EU were the main reason for price disparities even though the report concentrated on pre-tax prices only.
"The motor industry is actively seeking price harmonisation across the EU," said the chief executive Christopher Macgowan. "Although prices are falling in the UK, widely-varying taxation systems and the high rate of sterling continue to thwart our goal."
• Land Rover yesterday announced that it was cutting the price of all new Range Rovers by £3,000 because customers were importing them more cheaply from continental Europe.
The cheapest Range Rover, the County version, will now cost £36,995 and the top of the range Vogue 4.6 version will be priced at £49,995.
