Cars can now be bought with the weekly food shop, following the introduction of new European Union rules on car sales and servicing.

The changes to EU block exemption mark the beginning of new distribution techniques, such as internet sales and multi-branding, which will introduce more competition between different retail channels.

EU Competition Commissioner Mario Monti said: "More competition in car distribution leads to lower prices.

"By finally tearing down remaining obstacles to cross-border vehicle purchases, consumers will make use of the full potential of the single market for car purchases."

The new rules will become fully effective on October 1 2005 with the abolition of the location clause.