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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