THERE will be no ‘meltdown’ in residual values for diesel models, despite increasing registrations and continuing negative perceptions among used buyers.

That is the view of a new report, which says there is likely to be a gradual reduction in diesel premiums but in sectors such as MPVs and 4x4s diesel will continue to perform strongly.

The vast majority of used car dealers (88%) have noticed an increase in demand for diesel. The small car sector had the lowest increase in interest, and the report, compiled by CAP and Sewells and titled Diesel Directions found that many second-hand car customers have still to realise the benefits of diesel.

Industry commentators often point to the fact that the fuel economy advantages of diesel in many sectors are negated by the lower mileages the average used buyer does. The report found that existing premiums for diesel have been influenced by supply shortages but that a question mark remains over the medium and long-term impact on values as more and more defleeted diesels hit the market.

Mark Norman, who runs CAP’s future residual values forecasting division, said: ‘There can be little doubt that the supply and demand equation will change. However, there is no evidence that the sometimes predicted ‘meltdown’ in diesel residual values will occur.

‘There are areas of concern in the rest of the market. Diesel continues to suffer from some negative perceptions among a significant proportion of used car buyers. But misinformed and arbitrary such beliefs are, they remain a factor influencing choice and are unlikely to change overnight. This means the market for used diesels continues to present opportunities for growth, which could be influenced by marketing.’

For a copy of the report, contact Lisa Price on 01733 458254 or email lisa.price@emap.com