Fleet News

Car price action but no big shake-up

A SEVEN-point action plan to increase competition among suppliers of new cars and thereby reduce prices has been announced by Trade and Industry Secretary Stephen Byers. However, Byers has fallen a long way short of ordering a wholesale shake-up of the UK new car industry despite calculations that private car buyers in Britain are paying £1 billion a year too much for their new cars.

Any major shake-up in the UK dealer network must go before the European Commission - the existing block exemption runs until September 2002 - and there is no guarantee of price cuts despite moves by the Government to ensure 'fair play'. Monday's long-awaited publication of the 737-page Competition Commission report into the supply of cars in the UK concluded that prices in the UK have been 10-12% higher than in similar countries in Europe, and private car buyers are paying about 10% or £1,100 too much - totalling about £1 billion a year - for the average car, after taking account of discounts, trade-ins and finance deals.

In publishing the report at the end of a nine-month investigation, Byers said the findings 'cannot be ignored'. He added: 'They represent a clear and unambiguous call for change. The report confirms what many people have thought was the case - that in Britain we are paying over the odds for new cars. The reason for this is that the market is not operating as competitively as it should.'

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee