Although new car prices in Britain continue to fall, according to independent
sources like the Alliance and Leicester, the latest pricing survey once again
shows that varying taxation systems are the primary cause of new car price differences
The survey, published by the European Commission, points to reductions of more
than five per cent in nine UK models compared to the previous six months. It
also highlights wide differences in new car prices between countries like Germany
and Denmark, which has the highest sales tax in Europe.
SMMT Chief Executive Christopher Macgowan said ‘While tax systems vary so wildly
across Europe we will continue to see reports like this. It’s a simple fact
that if you want a truly single market with transparent prices then you have
to remove the variables that distort the market place.’
As well as tax differences, the EC report confirms that some of the additional
cost of certain models in the UK is due to higher specifications than in other
European markets. It also recognises the other key variable affecting prices
in the UK – the continued strength of Sterling.