Friday 18 January 2019

Scarcity of 'clean' second-hand diesels could bolster future value of trade-ins

  • But imports of 'dirty' diesels to remain high

  • And new car sales to fall 8.6pc, report says

'Diesel emits lower C02 (but higher NOx) than petrol.'
'Diesel emits lower C02 (but higher NOx) than petrol.'
Eddie Cunningham

Eddie Cunningham

The fall in new diesel car buying could have a positive impact on the value of used vehicles over the coming years, it is claimed.

The relative scarcity of cleaner, fresh diesels, as opposed to many older imports, should underpin good second-hand prices, according to Society of the Irish Motor Industry (SIMI) chief Alan Nolan.

His expectations will go some way towards easing concerns for thousands who are driving a diesel or thinking of buying a new one this year or next.

He said: "We remain confident that such new and nearly-new diesel used cars will continue to hold good values, as diesel remains the workhorse for business and those in rural Ireland."

"The reduction we have seen in the diesel share of the new car market may potentially leave these in shorter supply for those buyers for whom they are the best transport and environmental option at present, which you would expect to have a positive upward pressure in relation to future values".

He also emphasised that good trade-in prices generally are vital to keep people in new or newer cars and to ease the transition to electric vehicles.

He was commenting on a first-quarter report for the motor industry by economist Jim Power.

It shows how new diesel registrations accounted for 56.3pc of the market in the first quarter, down from 66.7pc on the corresponding period for 2017.

New petrol car registrations rose to 37.5pc of the total market, an increase from 29.6pc, over the same timespan.

Mr Power is forecasting 120,000 new car sales for this year, down 8.6pc on 2017.

But used car imports, the majority of them often older, dirty diesels, could reach 107,000 (up 15pc).

There are fears within the industry that new car registrations may not even reach 120,000 and that imports could top 110,000, leaving a narrow gap between the two and showing how much the UK cars are dictating buying decisions here.

Mr Power said: "Similar to last year, Brexit-related uncertainty looks set to continue, largely due to the uncertain performance of sterling and the impact of used imports from the UK."

The decline in diesel sales has, however, contributed to an increase in CO2 emissions (up 1.4pc) this year.

That is because diesel emits lower C02 (but higher NOx) than petrol.

Mr Power's report said: "Looking forward to the remainder of 2018, the other economic fundamentals that underpin new car registrations look set to remain positive.

"Used imports from the UK, though, are likely to remain a significant feature of the market and will undoubtedly displace new-car sales once again.

"The surge in used imports from the UK effectively means that UK used car values are directly impacting on the values of domestic second-hand car stock.

"This is making the cost of change to a new car more expensive, which is also serving to undermine new car sales."

On a brighter note, it seems we are spending more on higher specification cars, with the average OMSP (open market sales price) up 4.1pc on the first quarter of last year.

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