BRITAIN is still the most expensive place in the European Union to buy a new car, according to a new report.

Although the price gap with continental Europe has closed significantly, it is still worth shopping around across the Channel for bargains, it says.

The latest European Commission survey reveals that average difference between the highest and lowest prices for the same car in various EU countries is now below 20 per cent. But that is largely because car makers have answered complaints by increasing prices in the cheapest markets rather than lowering them in the most expensive, says the Commission: "In such cases, the benefit for consumers seems at least questionable."

But a saving of one-fifth on the new price is still attractive enough to justify the effort of buying abroad.

And the EU car price monitors still found glaring examples of much wider price gaps - including a Rover 214 with a massive 51.9 per cent mark-up in Britain compared with the French price for the same model.

An Alfa Romeo 145 can cost 45 per cent more in Britain than in Spain, the cheapest EU market for that model. A Toyota Corolla is 34 per cent more expensive in Britain than in Spain, while a VW Polo is 32 per cent more than in Sweden, where it is cheapest.

The Commission says currency movements and voluntary pricing measures introduced by car companies are responsible for the narrowing gap.

The single currency is another factor.

"The introduction of the euro is going to increase price transparency in euroland and should thereby promote cross-border trade and further diminish price differences," said the report. Examples of the latest new car price gaps between Britain and the rest (with prices adjusted for equipment differences) are:

Model - UK extra cost - Cheapest EU market

Rover 214 - 51.9% - France

Alfa Romeo 145 - 45.3% - Spain

Fiat Bravo - 45% - Holland

Rover 414 - 43.1% - France

Honda Civic - 39.4% - Sweden

Fiat Marea - 38.7% - Ireland

Daihatsu Gran Move - 37.3% - Austria

Alfa Romeo 156 - 36.9% - Holland

Mitsubishi Colt - 35.9% - Italy

Ford Mondeo - 34.6% - Spain

Peugeot 406 - 26% - Portugal

Volvo S70 - 25.4% - Sweden

Rover MGF - 21.6% - Ireland

Renault Espace - 15.9% - Holland

Story date: Wednesday 03 February

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.