With tighter margins and falling manufacturer bonuses for dealers, prices are unlikely to fall dramatically in 2003 Steve Evans, CarPriceCheck

Experts say competition among the UK's franchised dealers is at a "standstill", according to car price monitor CarPriceCheck.

CarPriceCheck blamed tighter margins and falling manufacturer bonuses for dealers, following record sales last year.

The average cost of a new car rose 0.08% in December 2002 compared with the previous month, the company said.

Pre-Christmas rush

There were still bargains to be had, however, with the cost of buying a discounted imported car falling by 1.19% in December compared with the previous month, while cars bought on the Internet were 0.95% cheaper.

Last month also saw some discounts of up to 21% on some Ford, Rover, Volkswagen and Citroen models.

The cost of purchasing a Vauxhall was on average 3.2% cheaper in the build-up to Christmas, as the manufacturer cut prices on 111 models.

Buyers of Renaults were also winners, with an average saving of 2.72% on 216 models.

Poor confidence

The start of the new year is traditionally a quiet time for car dealers.

CarPriceCheck said it was revising its prediction that the effects of the abolition of "block exemption", a system which allowed car manufacturers to control the supply of cars, would be seen in February 2003.

Instead, it said it believed there would be more one-off deals on specific models that manufacturers were finding hard to shift.

CarPriceCheck chief executive Steve Evans said: "Established franchised dealers have been falling by the wayside for the past few months, and more will certainly follow. It's a really tough market at the moment.

"With tighter margins and falling manufacturer bonuses for dealers, prices are unlikely to fall dramatically in 2003.

"Generally speaking we won't see the level of cuts witnessed during the second half of 2002."