In April, fleet diesel sales rose by 16.4% compared to the same month last year, while year-to-date sales were up 12.9%.The danger lies in this booming demand for new diesel cars outstripping demand for used diesel cars, creating oversupply in the second-hand car market, and thereby damaging residual values. Diesels are currently fetching hundreds of pounds over their petrol counterparts, but residual value forecasting expert CAP Monitor predicts that this premium could fall by 9% in 2002-2003.
Mark Norman, senior editor of Monitor, said: 'High-mileage company car drivers are already switching from petrol to diesel cars ahead of 2002. Increased supply could outweigh demand, depressing vehicle prices. Many private buyers are low mileage users which reduces the advantage of diesel. The best option for fleets is to select diesels on the merit of the engine.'
Glass's Information Services predicts that diesel used car values could fall by 3% over the next two years. Adrian Rushmore, Glass's managing editor, cars, said: 'There is a huge chasm between petrol and diesel at the moment, caused by excitement over new technology and the fuel crisis. It ranges from £500 on a Ford Focus to £1,300 on a Peugeot 306 HDi. But in two to three years' time, the market will begin seeing these vehicles in volume and there will be a possible easing back of prices by 2-3%, although I think the market will support modern diesel technology.'