Used petrol values surpass diesel
12 July 2012
Author: Rachel Burgess
Auction house BCA has reported that petrol values are holding their value better than diesels
While diesel cars remain the de facto choice for fleets, new figures show that they do not hold their value as well petrol models.
Data from auction firm BCA demonstrates that volume diesel cars continue to have a substantial average price premium over petrol in the wholesale market, yet their retained value is actually lower over what BCA states is the "typical 40-month working life of a volume fleet and lease car".
Typically, the average used fleet and lease diesel model sells for up to £1500 more than the average petrol car, broadly equivalent to a 25% premium.
However, in terms of retained value compared to the manufacturer's retail price, fleet diesel cars average around 36% compared with 39% for petrol cars.
BCA noted that could be partly explained by average mileage differences, with petrol cars doing around 30,000 miles over that time, compared to nearly double that figure for diesel.
But with the average price of a diesel being significantly higher than the equivalent petrol model, the scales are tipped in petrol's favour.
BCA's Tony Gannon said: "There can be little argument that the average price of a diesel car always outperforms that of a similar average petrol model.
"Research from BCA's Pulse report shows there is a clear and significant difference in average value at remarketing time - rarely less than £1200 and peaking at £1553 in October last year, which was equivalent to a 31.9% variance.
"However, when looking at the retained value over the typical working life of a volume fleet and lease car, the petrol car - perhaps surprisingly - is the stronger performer by some three percentage points.
"Of course, mileage is important, but then diesels are purchased with that higher mileage factored into the overall running costs."
Diesel registrations accounted for 52.5% of the market in 2011, with fleet operators having a much greater appetite than the private sector; nearly two-thirds of cars sold to the 25-plus fleet sector last year were diesels.
Gannon concluded that it is "quite possible that the new generation of frugal petrol engines will challenge diesel's position in the years ahead".
Follow BusinessCar on TWITTER.