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Proposed penalties for non-Euro 6 diesels will not affect residual values, say CAPBack

DieselNewsNO IMPACT on diesel residual values would follow London’s adoption of a proposed £10 penalty charge for non-Euro 6 diesel cars.

Only if a similar scheme were rolled out to other UK cities would demand for non-Euro 6 diesels be sufficiently dented to impact on used values.

According to residual values experts at CAP, the only impact on demand for diesels – even in the capitol – could stem from widespread misunderstanding of the scope of the current proposals.

Mark Norman, a senior consultant at CAP, said: “Too few cars are affected by the current proposal to have any impact on demand for diesel cars, whether or not they come under the scope of the envisaged daily £10 charge for entering central London.

“The picture might change if more cities adopt ultra-low emission zones and drivers find themselves paying more penalties but there is still a long way to go before that point.

“Car values are simply not that sensitive to localised factors, as we have already learned from London’s existing congestion charge. If they were we might have seen the values of electric vehicles rising in and around the capitol but there is precious little evidence of any difference in residual values between different areas in the country.

“The excitement in the media generated by the announcement of possible penalties for what will be quite old cars by the time this measure is introduced could be misunderstood by motorists.

“If they only hear that diesels in general will be penalised harder than other cars for entering the capitol this could conceivably have a small impact, but nothing of sufficient scale to translate into generally lower residual values.”

Posted by Sue Robinson on 08/08/2014