The downward trend in new car prices continued last month, figures out today showed.

Prices in February 2002 were, on average, 2.8% lower than in February 2001, according to a car price index compiled by Alliance & Leicester bank.

This fall was the largest year-on-year decrease since September 2001.

The only category of motor that rose in price in February 2002 was the luxury car sector (up 4.7%). The biggest price falls were among multi-purpose vehicles (down 6.7%) and city cars - a sector that includes the Mini and the Ford Ka - which went down an average 6.2%.

"The February fall is great news for consumers in the run up to the Budget when the Chancellor may make changes to fuel and vehicle excise duty," said Alliance & Leicester spokesman Andy Bayes.

The index also showed that one-year-old car prices fell by an average of 1.1% in February 2002 compared with the same month last year, while three-year-old prices fell 6.5%.