Toxin taxes and green deals: is it worth buying a diesel car?
Last year was a bumper year for diesel as a record 1.3 million new cars were registered in the UK, up 0.6% on the previous year. In March 2017, new diesel car registrations were at an all-time high of 250,000.
Fast-forward six months to September 2017 – the second pivotal month for car sales as new registration plates come out – the data is much less positive. Demand for alternatively fuelled cars grew 41% but diesel saw a 21% decline from a year earlier. The numbers dropped significantly from nearly 218,000 in September 2016 to just shy of 171,000 in September 2017.
What’s fuelling the decline in diesel?
There are a number of reasons why diesel cars are declining in popularity. Questions relating to their effect on the environment have come to the fore, which means motorists are rightly nervous about the future cost of driving diesel cars.
Last year saw the VW emissions scandal come to light, the Transport for London daily Low Emission Zone in Greater London is now in operation and September saw the introduction of the ‘toughest ever’ EU-wide emissions testing system come into force.
The government recently announced plans for vehicles to go green by 2040 and the London Ultra Low Emission Zone is due to come into force in 2019.
Further, a number of manufacturers, including BMW, Ford and Renault have also announced diesel car scrappage schemes on Euro 1-4 engines offering owners up to £6,000 for their old motors.
All these separate schemes and plans are driving negative sentiment towards the diesel motor industry.
Simon Benson, director of motoring services at AA Cars, says: “The diesel dilemma is a sensitive subject with drivers feeling that key decision makers led them astray – at first encouraging them to buy diesel cars as an eco-friendly alternative to petrol and then realising the fuel was not quite as clean as had previously been thought.
“Motorists were understandably angry as they had been encouraged to invest in diesel cars and they now faced pollution charges, clean air zones and even a looming ban on the sale of new petrol and diesel cars that will come into effect in 2040.
“However, although new diesel car registrations have dropped since the announcement of the ban, this is more likely down to consumer confidence, concern over pollution and the prospect of restricted and costly access to cities. It is very unlikely that it will actually affect anyone buying a diesel car right now – unless they are planning to have the same car for the next 23 years.”
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) echoes the point that confusion around air quality plans have inevitably led to a drop in demand for diesel.
He says: “September is always a barometer of the health of the UK new car market so this decline will cause considerable concern. Business and political uncertainty is reducing buyer confidence, with consumers and businesses more likely to delay big ticket purchases.
“The confusion surrounding air quality plans has not helped, but consumers should be reassured that all the new diesel and petrol models on the market will not face any bans or additional charges.”
He adds that if diesel registrations continue this negative trend, UK average new car CO2 levels could actually rise this year, at odds with the government’s drive to reduce levels.
Lower emissions and higher performance
While motorists may be nervous of buying diesel following the recent developments, SMMT says diesel cars emit on average 20% lower CO2 than petrol equivalents, adding that since 2002, diesel cars have saved 3.5 million tonnes of this harmful emission. In fact, SMMT says contrary to reports, diesel cars are not the main source of urban NOx.
The latest Euro 6 vehicles are the “cleanest in history and light years away from their older counterparts”. They’re equipped with special filters and clever technology that converts most of the NOx from the engine into harmless nitrogen and water before it reaches the exhaust.
Another point is that diesel drivers will continue to value the high performance and low fuel consumption of diesel as on average they use 20% less fuel while also covering 60% more miles.
Benson says: “Diesel vehicles are still a viable option for a lot of drivers as they are often considerably cheaper to run than petrol cars thanks to their fuel efficiency.
“If you live in a city then diesel is not really for you but if you are a motorist who drives long distances frequently, a diesel car is still a sensible choice, and you’ll save on fuel costs.”
Cost of diesels coming down
Cost is a big factor for motorists when considering buying a new or second hand car. Given the uncertainty surrounding diesel cars, prices have also been affected.
Data from car buying comparison site Motorway.co.uk found that average prices for diesel vehicles have dropped almost 6% since the beginning of the year as the ‘toxin tax’ and diesel scrappage schemes take bite.
It analysed 24,000 used car valuations made since the start of 2017, of ten of the most popular cars in the UK, comparing them against petrol equivalents. Valuations for some of the UK’s most popular diesel models were shown to be down by as much as 26% while petrol car valuations had increased by an average of 5%.
Alex Buttle, director of Motorway.co. uk, says: “Our analysis clearly shows that used diesel car prices are only going one way – and that’s down.
“We are now seeing savvy motorists choosing petrol, electric or hybrid used cars over diesel, and that’s already reflected in the value of second hand petrol vehicles starting to rise. That said, for those purely after cheap deals, it is definitely ‘bargain bucket bonanza’ time in the used diesel market.”
Benson echoes this point: “There is a healthy number of diesel vehicles being put up for sale in the second hand market – giving buyers plenty of choice and the opportunity to bag a bargain.”
For Chris Bosworth, director of strategy at Close Brothers Motor Finance, consumers shouldn’t turn their backs on diesel cars just yet as the government endeavours to move the UK from fossil fuels to electric, they still have a long way to go.
“While electric cars are not the only alternative, the government is clear that they should be the future, yet there is still a huge amount that needs to change to ensure that the infrastructure needed to support these vehicles is ready. Depending on individuals’ driving needs and location, diesel cars can offer better fuel economy and longer range, not to mention access to an abundance of petrol stations all over the country.”