Used diesel car shortages could bring higher values
New diesel car sales are falling so quickly that there could be shortages of them within the used market in the near future – potentially inflating used values.
That’s according to the Vehicle Remarketing Association, which says that while new car diesel demand has plummeted, corresponding used demand has stayed relatively firm.
Although overall the number of new cars entering the market is falling quite quickly – UK new car registrations fell 6.8% in 2018 while fleet was down 7.3% – diesel registrations are falling even faster, with registrations down 29.6% last year. In fact, since the Dieselgate saga broke two years ago, half a million fewer diesel vehicles have entered the used car market.
However, Philip Nothard, deputy chair at the VRA, points out that, generally speaking, demand for used diesels has not really fallen very much at all.
Nothard added that it was important to realise that new and used car buyers generally have different requirements when it comes to fuel types.
“In the company car sector, which accounts for around half of the new market, there has been a move away from diesel at a corporate level while, for private buyers, there have been factors such as rising VED rates.
“However, used car buyers tend to take a much more practical view. They have bought diesels over many years because they are tough, economical and practical – and these factors haven’t really changed.
“If we reach a situation where petrol and hybrid derivatives of a model are all that is really available in the used market, then used car customers will ultimately buy them, of course, but where a choice exists, many continue to have a preference for diesel.”
Nothard continued that it was not inconceivable that a situation could develop in the medium term where diesel derivatives of some types of car carried a price premium in the used sector.
“This probably wouldn’t happen across the market but could easily occur in, for example, the large SUV sector, where the running cost difference between petrol and diesel derivatives are very much in favour of the latter.”