Diesel resale values are predicted to remain stable during 2018, despite concerns that consumers are being pressured into choosing petrol or electric vehicle alternatives.
Data suggests that diesel new car sales have been affected by the demonization of diesel and negative press coverage around 2015’s diesel emissions scandal, as well as further reported incidences of diesel cars with NOx emissions beyond advertised figures.
While diesel new car registrations decreased by 20% year-on-year during the first two months of 2018, there have been no signs of a reduction for used diesel car sales in either Euro 6 or Euro 5 models.
In an effort to improve local air quality, diesel cars have been affected by measures including additional charges in London’s congestion zone, increased parking charges within some local authorities and a higher tax burden for diesel company cars.
However, industry analysts are reporting different fortunes for diesel cars sold at auction as opposed to the new car market.
Jayson Whittington, chief editor for cars and leisure vehicles at Glass’s, said: “The new car market appears to be experiencing a shift away from diesel. Negative messages being conveyed by sections of the media, as well as a change in direction by the UK Government has had a big effect, and is driving people away from buying what are among the cleanest vehicles currently available.
“In the used market, too, there has been a change. Petrol models have increased in popularity, which has led to stronger demand from trade buyers in wholesale channels.
“As a result, auction hammer prices and conversion rates have strengthened. What is interesting, however, is that the price performance of diesel cars hasn’t been significantly impacted.”
Derren Martin, head of current valuations at Cap HPI, suggested that used car values should stay stable for the foreseeable future, while noting that the current market activity could not have been predicted three years ago (before the onset of the diesel emissions scandal).
“Diesel cars seem to be performing in line with expectations, while petrol cars have been appreciating slightly, particularly small cars,” Martin said.
“For example, if someone had bought a used Škoda Citigo a year ago and driving 10,000 miles in it, it’s possible they could make money by selling it now. This isn’t what you would expect for something regarded as a depreciating asset.
“For now, it seems both petrol and diesel cars have stabilised in the used market and are performing in line with expectations.
“For certain uses, such as high motorway mileage and people driving 15,000-20,000 miles a year, we think diesel still has a role, particularly in executive cars and upper-medium cars.”
Used diesel cars offer benefits including better fuel economy, with no tax penalty and no liability for vehicle excise duty (VED) for those vehicles with CO2 emissions below 100g/km and registered prior to April 2017.
The reduction of new diesel car sales will also help to ensure that used diesel car values remain strong by reducing the supply of ex-fleet models returning to the market, increasing demand and, consequently, increasing prices.