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No sign of decline in used diesel car demand

Date: 02 May 2018   |   Author: Sean Keywood

A collapse in new diesel car sales hasn't been mirrored in the second-hand market. Sean Keywood reports.

Fleets looking to remarket diesel cars can be reassured that the second-hand market for the fuel remains robust, according to industry analysts.

Recent times have seen a big drop in sales of new diesel cars, which fell year-on-year by 37.2% during March. Blame has been attributed to confusion about the future of the fuel amid concerns over emission regulations and taxation.

However, this fall in demand has not yet been replicated in the used car market and, according to the Vehicle Remarketing Association (VRA), there is no reason to fear this will happen down the line, either.

Chairman Glenn Sturley said, "The motor industry finds itself in a situation where consumers are confused and worried about buying a new car, especially diesels.

"A generalised assumption has arisen that buying a diesel is somehow a gamble.

"There was a brief moment last year when this concern may have had some foundation, but it passed very quickly.

"What we now know is that there has been a relatively slight adjustment in used diesel car values, which has stabilised, and used diesel demand is currently very, very healthy. Any worries should really now have passed."

Sturley said that the VRA's extensive membership sells, inspects, transports and manages more than 1.5 million used vehicles every year, which is why it is confident in its assessment.

"We have a very accurate idea of what is happening in the used car market and we can say that diesel values are very solid," he said.

Automotive data firm Cap HPI has also found resilience in the second-hand diesel market. It found that although average diesel car values fell by 0.7% during March, they performed better than petrol cars, for which average values fell 0.9%.

Cap HPI said diesel values were particularly strong in the SUV segment, with many cars either increasing in value or staying level while values for their petrol counterparts declined.

Examples of this included the Renault Kadjar, Renault Captur, Citroen C4 Cactus and Honda HR-V.

The firm added that the upper medium segment had also seen diesel engined cars performing strongly.

Cap HPI head of current valuations Derren Martin said, "Feedback from trade buyers is that there is little or no resistance from consumers to buying used diesel cars.

"With over half the cars registered in 2015 and 2016 being diesel, it is important for values that this demand remains."

Among those to report evidence of second-hand diesel prices holding up well is remarketing firm Aston Barclay.

Group operations director Martin Potter said, "According to our new Market Insights report for the first quarter of 2018, our average ex-fleet used diesel price at auction was £9,768 compared with £9,802 in the first quarter of 2017, a fall of just £34 in 12 months. 

"Prices were actually £487 higher than the average price of all fleet stock sold across the group during the first quarter at £9,315.

"Considering the average age and mileage of diesel cars sold were higher at 42.3 months and 57,744 miles than the 2017 figures of 41.7 months and 54,665 miles, we have seen second-hand diesel demand and prices remain strong."

Also reporting resilient diesel demand is online remarketing firm Autorola.

UK group sales director Jon Mitchell said, "Diesel vehicles sold on our online portal returned a 0.3% increase in value to £11,158 in the first quarter of 2018; however, cars were, on average, three months older and had an extra 2,700 miles on the clock than those offered in the fourth quarter of 2017. 

"We sold a significant 48% more diesels in the first quarter of 2018 compared with the fourth quarter of 2017, reinforcing the fact that prices are remaining strong despite an increase in disposal volumes."