Diesels retain premium

Time 6:50 am, June 27, 2012

DIESEL engined cars’ values retain a substantial price premium, but it’s petrol cars that hold their values better says BCA.

New price data from BCA shows that while volume diesel cars continue to enjoy a substantial average price premium over petrol in the wholesale market, their retained value is actually lower over a forty month cycle.

The auction firm suggests this should provide food for thought for the wider industry at a time when new diesel registrations by fleets and businesses are at record levels.

Typically the average used fleet and lease diesel model sells for up to £1,500 more than the average petrol car, broadly equivalent to a 25 per cent premium. However, in terms of retained value compared to MRP (Manufacturer’s Retail Price), fleet diesel cars average around 36 per cent, compared to nearly 39 per cent for petrol cars.

Some of this is undoubtedly down to the sharp divergence in the average mileage covered during that time, says BCA.  For petrol cars it is around 30,000 miles, for diesel cars the average is nearly double that figure. But with average diesel MRP being around £4,500 higher than the equivalent petrol MRP, this tips the scales in petrol’s favour.

Tony Gannon, BCA communications director, 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 £1,200 and peaking at £1,553 in October last year, which was equivalent to a 31.9 per cent variance.’

‘However, when looking at the retained value over the typical 40 month working life of a volume fleet & lease car, the petrol car – perhaps surprisingly – is the stronger performer by some three percentage points. Of course, the mileage factor is important, but then diesels are purchased with that higher mileage factored into the overall running costs.’

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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