PRICES of new cars are on the way down, according to the What Car? Price Index.

The average new car is now 0.1 per cent cheaper than the same time a year ago – the first fall in any 12-month period since January 2003-2004.

The latest Index reports that small cars lead the way. City cars are 2.8 per cent cheaper and supermini prices have fallen 1.7 per cent over the past year. Family cars (down 0.1 per cent) are the only other faller.

The figures may not seem significant, but the timing is.

The falls occurred in the busy plate-change month of September, when prices usually rise compared with the quiet month of August. This year, they fell, despite a healthy demand among private buyers that was only 6 per cent below that shown in the previous September.