Major carmakers have agreed to lift servicing restrictions, the UK's trading watchdog has announced.

Owners of new Citroen, Ford, BMW, Volkswagen, Peugeot or DaimlerChrysler cars bought under warranty will now be able to choose where they are serviced.

Last year the Office of Fair Trading (OFT) said consumers were losing £500m a year through unfair warranty deals.

At the time of the study about half of all new cars were sold with warranties that included servicing restrictions.

Renault and MG Rover removed their servicing restrictions before the OFT's study was published in December 2003.

The report asked carmakers to lift restrictions on where new cars may be serviced, while under warranty. It found that servicing a car at a franchised dealer was typically £83 more expensive than at an independent garage.

There was also confusion among consumers over the options available to them, with more than two-thirds of motorists assuming their warranty would be invalidated if they used an independent garage, even when it was not the case.

About half of all new cars sold have warranties with service restrictions. More than 2.5m new cars are sold in the UK every year.

"Consumers should now benefit from increased choice and competition between franchised and independent garages," says OFT chairman John Vickers.