Europe 'could make our cars cheaper'

An internet car sales firm says the cost of some popular new models could fall by up to £1,740 if Europe changes the way vehicles are sold.

Jamjar.com, the internet site of insurance company Direct Line, says the current franchised car dealer set-up technically breaks European competition laws, but is protected by a block exemption system.

It says the removal of this system, which is being considered by the European Commission, would lead to a significant cut in prices.

The internet company says if block exemption is scrapped, it would be able to sell a Ford Fiesta 1.25 for STG£6,459, some STG£1,742 less than at present.

A Fiat Punto 1.2 could be offered for STG£5,999 - a saving of STG£895; and a Volkswagen Golf 1.6SE would be STG£12,495 - a reduction of STG£853.

Jamjar.com issued these figures as the company made its submission to the EC on the last day of the commission's consultation period.

Oliver Prill, Direct Line's e-commerce managing director, says: "Exempting manufacturers from normal competition rules is the reason why car prices are still so high in the UK."

He adds: "We are lobbying hard to make car buying easier and cheaper."