Soaring Fuel Costs Drive Down Used Diesel Car Values

The value of used diesel cars has experienced a notable decline over the last 12 months, with experts attributing the accelerated depreciation to soaring fuel costs. Analysis by Solera cap hpi reveals a 7% drop in the average value of diesel vehicles.

The trend has become more pronounced since March, as rising pump prices put increased pressure on demand for diesel. In contrast, the values of hybrid and battery-electric vehicles have moved in the opposite direction.

"Diesel at over 195p a litre is difficult for buyers to ignore, particularly when they are comparing it with hybrid and electric alternatives," said Chris Plumb, head of current valuations at Solera cap hpi. He added that the situation is not only affecting car owners' equity but also causing some used-car dealers to become hesitant about accepting diesel vehicles as part exchange.

Plumb noted that second-hand hybrids are proving "much more resilient," offering lower fuel costs without requiring a significant change in refueling habits, which is supporting their demand and values.

Further data from Solera cap hpi shows that in October, diesel values at three years old and 60,000 miles fell by an additional 0.6%. This marks the fifth consecutive month where diesel has been the weakest-performing fuel type in the used car market, a trend directly linked to the surge in oil and diesel prices.

Self-charging hybrids saw a 0.5% increase in value during October, while fully electric cars rose by 0.3%. The increased cost of fuel has also extended the time diesel cars spend on dealer forecourts. In September, diesel cars took an average of 41 days to sell, compared to 32 days for hybrids and 33 days for electric vehicles.

Despite the pressure on diesel vehicles, the wider used-car market has remained relatively stable, with average values for three-year-old, 60,000-mile cars decreasing by only 0.3% in October.

Carwow reported a significant drop in interest in new diesel models, with a 33% decrease in test drive requests between March and the end of September. Demand for new petrol models also dipped by 25%, while hybrid enquiries fell by 8%. Conversely, electric vehicle (EV) enquiries increased by 28% during the same period, indicating a potential acceleration in the shift away from traditional combustion engine vehicles.

Iain Reid, consumer editor at Carwow, commented on the changing market dynamics. "Diesel has long been the go-to choice for drivers covering big mileages, thanks to its fuel economy and long-distance range, but soaring fuel prices are changing the maths," he said.

Reid highlighted the growing appeal of EVs, noting that advancements in range and charging infrastructure are addressing traditional barriers. "Even when relying on public rapid chargers, our calculations show that an EV can now save hundreds of pounds a year compared with a diesel car," he added.