FLEETS still have the potential of sourcing cheaper cars from other countries, according to the European Commission.

The latest report on car prices shows that price convergence for new cars across markets continues.

'However,' it adds in a statement, 'the latest figures available show that many European consumers can still make significant savings by buying their cars in other member states.'

Price differentials between certain countries, and for certain models, are still significant, the EC said. Pre-tax car prices are lowest in Denmark, Greece and Finland. Prices in Germany, the biggest market, and to a lesser extent in Austria remain among the highest.

Competition commissioner Mario Monti said: 'I'm pleased that price convergence for cars has made a step forward in the EU. European consumers can still make good deals abroad.'

The latest figures are the first to be produced since the new car distribution block exemption regulations came into force.

The EC said the full effect of the new rules will be felt from October next year when dealers will be permitted to set up in other countries. An option to open where they wish 'is expected to stimulate further market integration and price convergence.

At the moment, competition between dealers from different member states and the level of cross-border purchases can still be improved'.

Monti added: 'I'm satisfied that this convergence is proceeding smoothly - unlike the predictions made by some in the industry, consumers in member states with high taxes on car purchase do not seem on average to suffer from the new block exemption regulation as far as prices are concerned.'