Prices for new cars sold in Britain fell by a record 3.6 percent in the year to March, according to a survey by mortgage lender Alliance & Leicester.

It said it was not clear whether the drop was spurred by expectations over the content of a Competition Commission's report released this month.

The survey showed car prices in Britain were 10 to 12 percent higher than in similar countries in Europe and that private car buyers were paying about 10 percent too much.

Trade and Industry Secretary Stephen Byers has vowed to increase competition in the supply and selling of new cars to bring prices down.

"Alliance & Leicester Car Price Index figures show that the downward trend in new car prices is back on course," said Trevor Hilliard, managing director of retail financial services at the mortgage lender.

"It is too early to see what impact the Competition Commission's report will have on prices, but there are definitely some good deals to be had now, particularly in the second hand market."

The survey said however that some new car categories remained immune to the downward price trend. Prices for family and executive cars increased by 1.6 percent and 1.2 percent respectively in the year to March.