Fleet News

Luxury diesels tipped as future residual 'stars'

CARS such as the BMW 320d, Audi A4 1.9 TDI and Mercedes-Benz C220 CDI are set to be the residual value stars of the future, according to Glass's Information Services.

Since the turn of the year, so-called diesel E-sector cars have taken 29.6% of their sector, compared to overall diesel sales of 21% of the market. Although increased car sales are set to push down used car values in all sectors, these models will suffer less than most.

Richard Crosthwaite, car editor (specialist) at Glass's, said: 'New diesel sales are growing at a far higher rate than the market as a whole. Fleets and small businesses have largely accounted for this, which means their used car disposals mix in two or three years' time will reflect this.'

Crosthwaite added that with stronger residuals than top-of- the-range Ford Mondeos and Vauxhall Vectras, E-sector cars are getting lower monthly rentals from contract hire firms.

This in turn is attracting drivers into BMWs, Mercedes, Audis and Jaguars, despite lower specification levels than models from Ford and Vauxhall.

But he was cautious in predicting a completely risk-free future for E-sector diesels, saying: 'This begs the question of what happens in two to three years' time when more of these cars come back into the market?

'It is safe to assume residual values will weaken due to increased supply.

'However, there will still be strong demand for these cars as the latest technology comes within reach of the buying public. To some limited extent, this additional demand will soften future price falls.'

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