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Will proposed tax affect a diesel car’s used value?Back

DieselWith Boris Johnson announcing last week measures to tax diesel-engined cars for emissions purposes, it is well worth considering what the impact of this might be on the value of used diesel cars.

Up until last week, many motorists favoured diesel as their fuel of choice due to the fact that diesel cars tend to be more efficient and economical than their petrol equivalents. In fact, such is the appeal of diesel cars, they now make up just over half of all new-car sales.

In summary, diesel cars produce less carbon dioxide, a gas that was for many years considered the main reason for the world’s pollution issues. Despite the fact that diesel cars usually cost more than their petrol counterparts, ultimately they hold their value better so you’ll get a better deal with it comes to resale time. Although, this depends on the number and type of miles you do.

This week, diesel car owners have naturally been annoyed to find out that, having been encouraged to buy their cars to fit in with the UK’s CO2-based taxation system, they may now be penalised for doing so. London’s mayor, Boris Johnson has recently announced that he wants a new £10 tax for diesel cars to enter new Ultra Low Emissions Zones. Cities such as Bristol, Birmingham and Leeds are all keen to follow suit – but what will this mean for diesel car owners?

Firstly, the penalty is not set to come into place until 2020, although from the start of 2015 every diesel car will be required to meet Euro 6 emissions legislation whereby nitrogen oxide levels in cars will be capped at 80mg/km, bringing levels down by more than 50 per cent compared to the Euro 5 emissions standard cars have had to conform to since 2011.

Boris Johnson’s office believes that this will make Euro 6 vehicles exempt from penalty, but with the penalty unlikely to apply to cars five years old and newer, used car price experts agree that residual values are unlikely to be affected.

CAP’s Mark Norman told the Telegraph online the following: “It could have an impact on used prices if other cities follow London, but while the capital is big it’s not big enough to hit residual values.”

Richard Parkin from Glass’s added: “We don’t think it’ll have an impact. The congestion charge is substantial as it is, so if you can afford to pay that on a regular basis, it’s unlikely another £10 will put you off a diesel.”

In summary, if you’ve decided to buy a diesel car, go for a Euro 6-compliant model and you can rest assured that Boris Johnson’s emissions tax is highly unlikely to affect your investment.

 

 

Posted by Leana Kell on 12/08/2014