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BCA report: Fleets should consider petrols

Date: 07 September 2012   |   Author: Tristan Young

Cap argues that it's not the badge but fuel consumption that really matters to buyers

Fleets should pay closer attention to used car buyers' preference for petrol-powered cars, according to automotive industry expert Professor Peter Cooke.

Speaking at the launch of BCA's Used Car Market Report 2012, Cooke, the publication's author, said the latest car-buyer research shows that of those looking to buy a vehicle in the next year, 40% were considering a used petrol car.

This compares with 27% looking for a used diesel car.

Cooke believes that higher initial prices, higher perceived servicing costs and higher fuel prices put used car buyers off diesel cars.

He added that because used car buyers typically covered fewer miles it took longer for them to recoup these extra costs.

Despite higher used-car demand for petrols, new diesel car sales to fleets run at almost two-thirds.

The solution for fleets, according to Cooke, was to make sure they were using comprehensive whole-life-costs data when selecting their vehicles so that they could balance the better residual value of petrol vehicles against fuel costs.

The BCA report also predicted a strengthening of residual values, particularly for vehicles less than five years old due to the drop in new car registrations and fleets holding onto vehicles for longer.

Cooke believed that manufacturers were also holding back on sales to daily rental firms, which would compound this factor.

However, when BusinessCar asked if this strengthening of residual values would lead to leasing firms lowering monthly rental prices and then losing money on disposals at a future date, as has happened in the past, Cooke said: "I think leasing companies have learnt from the past and are unlikely to fall in the optimistic RV trap again."

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