The retail price index section of the research shows that the average retail price of a new car in the UK is now 500 euros lower than the average price of the similar car in the euro currency zone.
Only in Italy are average pre-tax showroom prices lower than those in the UK, according to the research, which analyses car prices in 19 countries against the average price of a new car in the euro currency zone.
The research also shows that UK pre-tax prices are now in fact 7 per cent below the average in Germany.
Charles Seguin of PricewaterhouseCoopers, which undertakes the research for eurocarprice.com, says: “Continental suppliers now find it very hard to undercut UK car dealers' prices.
“With May's new car registrations the second highest on record and buoyant industry forecasts for the remainder of the year, the short term prospects look bright for UK retailers.”