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Survey reveals drivers are less likely to choose diesel following Budget changes

Date: 29 November 2017

Drivers are less likely to buy or choose a diesel as their next car following the introduction of the tax changes in the Autumn Budget Statement, according to new research from CLM Fleet Management.

Included in Chancellor Philip Hammond's announcement was an additional 1% Benefit-in-Kind tax rate for diesel cars from April 6 next year, in a move, according to the firm, that is estimated to cost around 800,000 company car drivers an extra £70m a year.

The additional surcharge will apply to all diesel cars that did not meet the latest emissions testing limits under Real Driving Emissions Step 2 (RDE2), a new EU emissions testing standard which applies to all new car registrations from January 2021.

The EU timetable for the introduction of RDE2 means that it is almost certain that no diesel cars currently on the UK roads will be exempt from the increased charge.

At the same time, the Chancellor introduced a Vehicle Excise Duty (VED) supplement that will apply to new diesel cars first registered from next April, so that their First Year Rate will be calculated as if they were in the VED band above.  

The CLM study which was carried out by independent market research company, ID Insight Consulting, asked a sample of over 250 drivers: "How will the new VED increase for new diesel cars impact on your likelihood to choose a diesel for your next new car?"

A total of 59% of respondents said they were less likely or much less likely to buy or choose a diesel as their next new car as a result of the rise in VED from April.

Drivers were also asked about their reaction to the 1% increase in BIK tax for diesels and the fact that electric and hybrid vehicle drivers will now not have to pay BIK tax for recharging their vehicles at work.

Some 62% of respondents said the changes would not alter their buying decision for their next new car, although 30% said they would be more likely to choose a plug-in car and 17% responding that they would be less likely to choose a diesel car.

John Lawrence, managing director at CLM, said. "We have already seen a steep decline in diesel sales this year as drivers have reacted to negative publicity around poor air quality and diesels. And these latest announcements look set to accelerate that process.

"However, there is a considerable irony here in that the current generation of Euro 6 emission level diesels are the cleanest diesels ever to hit our roads with lower levels of NOx, particulates and CO2 than ever before.

"The new generation of diesels, including those that meet the RDE2 standards, will be cleaner still, and we maintain that diesels, particularly in situations where long range driving is standard practice, still have a perfectly valid and acceptable role to play in the fleet mix for many companies."