British V-reg Car Buyers Pay £1.2billion Too Much

In the week that official figures for the September sales of 'V' registration cars are revealed, Direct Line claims that British drivers could have saved £1.2 billion had they bought their new cars on the continent. At the same time, Direct Line has revealed figures from its new Direct Line Motoring Report showing that over half of British drivers would consider buying their new car on mainland Europe.

The Society of Motor Manufacturers and Traders has predicted 400,000 V-reg cars will have been sold in September and figures indicate new car buyers can save on average, £3,100 by buying on the continent.

Annette Court, Direct Line's managing director, motor says:

• "Clearly British drivers are not getting a fair deal and it's time to put a stop to this. Car buyers are fed-up with paying so much more than on the continent. British dealers should take the opportunity to reduce car prices before buyers flee abroad."

The Direct Line Motoring Report, based on a MORI survey*, was commissioned by Direct Line to gain an insight into some of the big issues affecting British car drivers today. It reveals:

• One in two drivers (56%) say they would consider buying a new car on mainland Europe rather than in the UK.
• A massive 95% of drivers believe it is more expensive to buy a car in the UK than in the rest of Europe.
• 74% of drivers accused either the Government and/or motor manufacturers of being responsible for inflating UK car prices.

The report highlights a major issue for UK motorists, which is that the legal framework in Europe, in effect, results in consumers paying different prices for the same car in different EU member states.

Commenting on the survey findings, Annette says:

"Direct Line takes a keen interest in any issue which affects our customers - the British motorist. The Direct Line Motoring Report voices the opinion of consumers and gives a clear message that British car buyers are extremely dissatisfied with the prices they are being forced to pay, compared to the rest of Europe.

"A car represents one of the biggest capital outlays for consumers and Direct Line believes they deserve to be treated fairly when it comes to pricing. Government should take a strong stand on this issue, and make it clear that it will work with other EU Member States for the non-renewal of block exemption in the run-up to its review in 2002."

Current EU regulation, known as block exemption, means that the motor industry in Europe can restrict the supply of new cars so that they are only available though approved dealers. Block exemption, due to be reviewed in 2002, basically means that car manufacturers - unlike EU manufacturers of most other goods - are able to restrict supply and therefore inhibit competition. This keeps prices high.

Other findings include:

• Germany, Netherlands and Belgium came top of the list when respondents were asked which European country would be the best to buy a car from, although European Commission figures suggest Spain and Finland are among the cheapest.
• Nearly two-thirds, 63%, of male drivers would consider buying on the continent, compared to fewer than half, 45%, of women.
• Six in ten, 61%, of drivers aged between 17 and 24, but only 42% of over 64 year olds, would consider buying abroad.
• 33% think that buying a car in Europe will be time consuming, while 22% think that it will be more difficult to sort out any problems.

The report also asked drivers about their views on driving abroad. The findings revealed that Italians are perceived to be the worst drivers, followed by the French, despite official figures which show that Portugal, followed by Greece, have the most road deaths per capita.

Nearly six in ten, 57%, of drivers had driven abroad with 48% of women and 39% of men citing driving on the opposite side of the road as being the most difficult aspect of foreign motoring.

The Direct Line Motoring Report available next month also examines the views of consumers on other key issues affecting Britain's motorists. Issues include:

• buying habits and buying cars
• aggression on the road
• the driving test and the Highway Code
• car maintenance and servicing

Technical details

*Survey conducted by MORI Financial Services on behalf of Direct Line between 8-21 July 1999. Interviews conducted among 2,000 adults aged 17 and over, who are Driving Licence holders and who have driven at least once in the last month.