Demand for tax and fuel efficient diesels ahead of legislation changes in April, helped push prices for new cars down by 1.34 percent during February, according to data released by independent price monitor, CarPriceCheck.

With the new carbon dioxide emissions-based benefit-in-kind tax system just around the corner, nearly 40 percent of all recorded price cuts from UK suppliers last month were for low-emission diesel models. Average transaction prices for these fell by 3.2 percent compared with January.

Although prices for the market as a whole dropped for the second month in succession, the downward momentum was chiefly the result of aggressive pricing from the larger franchised dealer groups. Independent-or family-owned dealers actually recorded a 0.96 percent increase in prices during the pre-02 registration plate build-up.

The biggest falls occurred in the executive segment where prices dropped by 2.07 percent on some models from Alfa Romeo, Audi and Jaguar. Despite heavy C5 discounting from Citroen, prices within the large family car sector populated by the Ford Mondeo and Renault Laguna amongst others, fell by just 0.14 percent.

Popular superminis like the Peugeot 206 and Toyota Yaris recorded a price dip of just over one half of one per cent (0.56 percent) leaving customers with a market average discount of 6.09 percent across the segment.

The price of cars imported from Europe fell, down 0.66 percent, for the first time in five months leaving an average saving of 13.5 percent off the UK manufacturer list price.

CarPriceCheck noted that diesels are now viewed more favourably by car buyers thanks to improved performance, economy and CO2 performance compared with petrol models.

Diesels broke all sales records last year so it’s no surprise that retailers have spotted even more growth in the market and are responding accordingly, the price monitor said.