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REMARKETING: Green and black: the war of fuels

Date: 04 December 2013   |   Author: Jack Carfrae

Despite this, Woodward says large, petrol-engined vehicles shouldn't necessarily be avoided, because they can be sold effectively and for good returns overseas: "Don't write-off big-engined petrol cars. They usually go abroad - foreign buyers are good customers. and [large petrol-engined cars] often sell for well-above guide prices. There is strong demand for the BMW 7-series and Mercedes E- or S-class, but they need to be highly specced too."

Even though diesel is the default choice for a lot of fleets, and has the benefit of stronger values, there are signs that the tide is turning. There is a case for petrol vehicles in the long run, at least according to BCA. The firm reckons that petrol fleet vehicles tend to retain more of their value over their working life, which can give them the edge over their equivalents on a long enough time span.

Henstock says when looking at the retained value over the typical 40-month working life of a volume fleet and lease car, the petrol car - perhaps surprisingly - is generally the stronger performer by one percentage point. In January of this year, the average diesel volume model retained 38.9% of MRP at time of sale, while the average petrol retained 39.8%.

"Some of this is undoubtedly down to the sharp divergence in the average mileage covered during that time. For petrol cars it is around 30,000 miles, for diesel cars the average is nearly double that figure. But with average diesel MRP being around £4500 higher than the equivalent petrol MRP, this tips the scales in petrol's favour."

It's also worth bearing in mind the price premium for diesels and the point at which this makes sense for the end user. You only have to look at new city cars such as the Volkswagen Up and its Seat Mii and Skoda Citigo spin-off models - none of which are even offered with diesel engines - to prove that demand in this sector lies strictly with petrol.

Managing director of Arnold Clark Vehicle Management, Hugh Wallace, explains: "At the economy end of the market, diesel is not so attractive. Quite often the increase in price for a small diesel vehicle is not cost-effective, so this is where small petrol vehicles are still much more popular."



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