Fleet News

Marketwatch: Dealers divided over future residual values

NEW research shows dealers are split on the future of diesel residual values as more used models arrive on the market.

The firm vehicle remarketing solutions is reporting that 45% of dealers believe the residual value of diesel vehicles will increase over the next two years, whereas 45% think it will stay the same. Only 10% think values will decrease.

Mike Pilkington, managing director of vehicle remarketing solutions, said: ‘The increasing price of oil is driving demand for diesel vehicles. We are continuing to see diesel vehicles performing particularly well, especially premium marques, Renault Megane, Peugeot 206 and Volkswagen Polo. The new generation of diesel engines is undoubtedly driving the strength of diesel residuals.

However, market analysts believe the premium between diesel and petrol models on the used market will continue to fall over the next two years, with diesel values levelling towards the end of 2006.

November’s CAP Monitor editorial stated that the increased availability of ex-fleet diesel cars will gradually close the gap between petrol and diesel.

It said: ‘The diesel used parc is expected to further increase due to the availability of more examples, the vast majority ex-corporate vehicles. This will result in a further erosion of the premium these cars are expected to achieve over their petrol equivalents. By late 2006, the reduction in diesel premiums is expected to level out and so does not adversely effect portfolio measurements.’

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