Research has revealed that car prices today are frozen at the same level as in June 2003.

According to the What Car? Car Price Index, the cost of new cars has fallen during four of the past five months. The average new car now costs 0.5% less than a month ago and What Car? predicts further falls ahead.

Sales to private customers are down 4% in 2004 compared with 2003, according to the Society of Motor Manufacturers and Traders.

In December, city car prices have dropped by 2.4% and family cars have become 2.3% cheaper.

In four other classes, prices have dipped more modestly, with MPV people carriers 0.5% cheaper month on month, 4x4 and executive car prices each down 0.4%, and small cars 0.3% cheaper.

Three classes have risen slightly in price over the past month: luxury cars (up 0.5%), superminis (up 0.3%) and compact execs (up a nominal 0.1%).

David Motton, What Car?’s editor, says: “Whenever sales start to slow down, salesmen will be keener to offer a big discount. Now is a good time to snap up a new-car bargain. You should never pay the full asking price for a new car. Our research proves you can save on average £1518 – that’s 8.5% off the list price.”