The European Commission’s latest car price report shows that real car prices (price change set against inflation) in Ireland fell by 5.7% in 2010. This is the third biggest drop in the eurozone and well above the -1.5% eurozone average. Car prices fell in almost every EU country in 2010.

Taking all EU countries together, the average drop in car prices is 2.5% in real terms in 2010. List prices for new cars also converged slightly. These long-term price trends support the Commission's decision last year that specific competition rules for the sale of new cars are no longer justified.

"It is good to see that consumers in Europe are benefitting from competition in the markets for new car sales and continue to enjoy significantly falling prices in real terms. The fact that price differentials between member states narrowed further, is a positive indicator of cross-border competition. I am also delighted to see that for the first time in a decade, real EU-wide prices for repair and maintenance services stopped increasing, a sign that the sector has understood the new rules of the game" said Joaquín Almunia, Commission Vice President in charge of competition policy.

A total of 24 EU countries recorded a fall in real car prices. Prices were stable in another two countries (+0.2% in both Italy and Malta) while they increased in Portugal (+2.6%). In the latter case, however, it should be noted that buyers benefited from a greater-than-average fall in real car prices the previous year (-6.7%).

The fall in real prices was particularly marked in Slovakia (-17.4%), Bulgaria (-13.5%), Slovenia (-11.6%) and the Czech Republic (-9.0%). In Poland they decreased by 5.6%. Among the large markets, real prices decreased most notably in the UK (3.7%), while Germany, Spain and France experienced more moderate price reductions (-1.9%, -1.6% and -0.9% respectively).

The fall in real car prices across the EU continues a trend observed for more than a decade, which indicates that competition between car manufacturers on the market for new cars is working.

Real prices for repair and maintenance, which had increased over the last decade by more than the general inflation levels, did not rise in 2010.