A report issued today by automotive pricing analyst, eurocarprice.com (http://www.eurocarprice.com), reveals that new cars are becoming cheaper in most European markets because nominal price increases by manufacturers are outweighed by specification improvements.

List price rises have added 1.1% to the price of the average new car in Europe over the past 12 months. But the increase is outweighed by equivalent improvements in specification and currency movements, resulting in a real-terms fall of 2.2% in pre-tax prices.

The report, the European Car Pricing Review, also analyses movements in the value of two-year-old cars. These are currently 0.6% lower on average than 12 months ago, but the trend has reversed in recent months, and prices rose by 0.7 per cent in the last quarter.