A friend of mine asked me whether he should sell his 6-yr old diesel car now. I could not answer because I just don't know the answer.
Later, I thought about trying to answer this in a logical manner.
Price is determined by supply-demand balance.
In recent future, supply of diesel cars will consist of
1 manufacturers selling new
2 PCP buyers handing back vehicle after 3-4 years
3 Current owners selling their cars to used market
The demand of diesel cars will come from
4 Where no alternative options avialable e.g. SUV
5 very high mileage users where petrol is uneconomic
The number of buyers #5 is unlikely to change in general so we'd assume it as constant
The factors that can affect the demand-supply
6 Public sentiment against diesel for not buying new
7 govt legislations to penalize diesels in city, increased taxation etc.
#1 will come down in over time. It can be influenced by whether makers try to discount in order to clear their diesel stock or start restricting supply (e.g. Kia announced no more new diesel models for Rio and Venga).
#2 will possibly increase
#3 could be interesting - either people will hold on to their cars or will rush to sell in order not to lose futher money when diesel cars become scrap
#4 will depend on #1
#5 might be affected by hybrids
So, considering all these factors, there must be sweet spots when
[a] current diesel owners sell their cars at best price
[b] new diesel owners (bargain hunters) buy at rock bottom price
For obvious reasons, [a] will occurr slightly earlier than [b].
The big question is, when will [a] and [b] happen?
(based on your own perception/gut feeling/analysis etc.)
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Supply equals demand. Only the price changes (well, in theory anyway).
Where prices are will depend partly on the appeal of alternatives. The pendulum could swing the other way as public awareness catches up with the fragility of some small turbo petrols or when regulations change.
There's a big overhead in changing cars so for as long as the one you have suits your needs the most economical choice is probably to keep it. A low value isn't a problem if you aren't selling it.
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I don't believe the British government has the political will (or guts) to go after existing diesel owners, at least for the next few years. They will leave it to local government to bring in city centre bans, pollution charges, punitive permit charges etc which will have a real impact on diesel owners, while they can shrug and say "not us, guv!"
I give it 5 years before you can't take a diesel car into any major city centre either at all, or without paying, and 10 before the same applies to petrol cars. We need to accept that the days of IC generally are numbered, and the long term resale value of any of them is pretty bleak.
To answer your question, I think we will start to see widespread local usage restrictions on diesel cars by 2023, and given these things are normally announced a couple of years ahead, diesel residuals will start to be adversely affected somewhere around 2021. As demand falls, resale values will fall away, but will be propped up slightly by the fact that diesel is still a great choice for higher mileage users who travel inter city rather than intra city. When diesel car registrations fall to a certain level, assisted by scrappage allowances against new EVs, and the resulting voter impact is small enough, central government will tax them off the road, or ban them altogether.
Of course, this is the start of a general assault on the internal combustion engine. I predict a lag of perhaps a decade before the whole thing is repeated on the petrol engine. This will coincide with a big increase in the range and performance, and lowering of cost of the EV offerings on the market. By the mid 2030s, I reckon internal combustion powered cars will be in a fast shrinking minority on the roads, and the proposed ban in 2040 will be almost self enforcing.
Nobody at anything other than the absolute bottom end of the used car market is going to want IC powered cars of any sort from 2030.
Last edited by: DP on Wed 14 Feb 18 at 12:51
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>>I don't believe the British government has the political will (or guts) to go after existing diesel owners
Or the need.
As I said a year or so ago, they don't need to do anything, just say that they are thinking about it and then claim credit for the reduction in diesel vehicles without actually having to do anything.
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>>A friend of mine asked me whether he should sell his 6-yr old diesel car now.
Simple. If he wants a new car he should sell it now; if he doesn't then he should wait until he does. In five years' time it will be worthless. But in five years' time it will be worthless ANYWAY as it will be eleven years old. An eleven-year-old car at the point when diesels become illegal sounds like a perfect achievement.
As I am in London, mine will become (as good as) illegal in April 2019. I therefore am planning acquiring a new (to-me) petrol in the flat spot for sales just after Christmas. We will see what happens. The value of my much-loved Accord (2005) is about £250 anyway (sale to dealer).
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Surely a good idea of future diesel values will be getting PCP quotes on diesel cars?
The manufacturers will do all their homework and have a good idea how much they are willing to give you for the car at that time?
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Too many moving parts.
They have to balance the expected values with shifting what they need to sell now. Ironically that could mean high buy backs/low rentals.
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In France at the moment and even their car mags are asking the same questions of diesel cars - where diesels have traditionally been more popular.
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Sweet spot for diesel car price - Manatee
