Minor drops in the value of diesel car values have remained largely in line with market forecasts, and should be no cause for concern, Cazana has said.
The news came after new diesel car sales fell 25.6% in January, after a poor performance in 2017.
In contrast the market for used diesel cars grew in 2017.
According to Cazana, many dealers are finding that retail customers need help understanding just how cleaner modern diesel cars are to older models, in the used market running costs become a more important factor compared to the environmental impact.
Diesel values dropped at 24 months and 24,000 miles, 36 months and 36,000 miles and at 36 months and 60,000 miles, when their values were calculated at January 2018 was compared to January 2017.
The largest drop was in the 24 month category, were worth 59% of their original cost in January 2018, compared to 62% in January 2017.
In contrast petrol residual values grew by between four and five percent in each of these segments.
Rupert Pontin, director of valuations at Cazana, said: “This is interesting in several ways and the first thing to consider is whether the volume of product has played a significant part in these trends. As we know the market has seen considerable increases in new car registrations in recent years and the laws of supply and demand usually show that as the volume of product increases, so does demand and therefore values will dip.
“Where national sentiment has been portrayed as being strongly anti diesel with implications of an imminent collapse in used car values, the data overrides the anecdotal discussion. Comments from trade buyers nationwide eager to buy diesel cars at a lower value are shown to be subjective in the face of the dynamic retail data from Cazana.com. Whilst markets can shift quickly it is apparent that diesel values have dropped largely in line with market forecasts and as such it would seem there is no immediate cause for concern.”
For a full analysis of residual values, including alternatively fuelled vehicles, read Pontin’s blog on Motor Finance here.