NEW car prices are continuing to fall, with lower and upper medium sector cars leading the way, according to latest figures from CAP Motor Research. The latest CAP Index of new car prices shows that list prices this month are down 1.5% on April last year - continuing a trend which began nine months ago.

And the rate of price cuts has increased slightly on last month when the Index revealed a year-on-year reduction of 1.4%.The Competition Commission report into the supply of new cars calculated that UK new car prices had fallen on average 6.5% in real terms in the last four years, but claimed they were still, on average, about 10% too high.

However, CAP senior economist Ramesh Notra said: 'Despite the Competition Commission's ruling that manufacturers are overpricing new cars, list prices have already been falling consistently since last summer. Taking inflation into account, along with improvements in specification, car buyers are already enjoying significantly better value for money.'

CAP calculates that only 4x4s (up 0.3% year-on-year) have seen price rises, while all other sectors have recorded price falls: superminis (down 1.5%), lower medium (down 2.2%), upper medium (down 1.8%), executive (down 0.6%), MPV (down 0.6%), sports (down 1.2%).