Car prices have dropped in Europe but it keeps getting more expensive for drivers to fix their vehicles, highlighting the need to crack down on exhorbitant repair costs, the EU said on Friday.

The European Commission, the EU's competition watchdog, said the prices for repair and maintenance services as well as spare parts rose "well above inflation" in 2009, by 1.5 per cent and 0.7 per cent respectively.

"I am very happy that consumers in Europe are continuing to benefit from strong competition in the markets for car sales," European Competition Commissioner Joaquin Almunia.

"At the same time, I am dismayed to see that the price for repairs and spare parts continued to rise during the economic recession," he said.

The European Commission estimates that repair bills account for 40 percent of the total cost of owning a car.

New commission rules took effect on June 1 to curb an "abuse of warranties" by manufactaturers which demand that cars be serviced only in authorised garages. While repair costs went up last year, car prices dropped in 24 of the 27 EU members states, the commission said.

Overall, car prices fell by 0.6 per cent in the European Union.

They rose by 7.7 per cent in Britain and 2.7 per cent in Sweden, the commission said, noting that the two countries had "benefited from an extraordinary fall" in prices in 2008 of 9.7 per cent a 5.0 per cent respectively. Prices were stabled in The Netherlands. The biggest drops in car prices were recorded in the newest EU member states, with a fall of 13.4 per cent in Slovenia, 11.1 per cent in Lithuania and 11 per cent in Slovakia.

"The fact that most new member states were harder hit by the recession than the EU as a whole in 2009 may have contributed to these price decreases," the commission said.

Among the EU's big economies, car prices fell by 4.7 per cent in Spain, 1.1 per cent in Italy, 1.0 per cent in Germany and 0.6 per cent in France.