Fleet News

Diesel premium ‘to remain’

There is controversy over whether the residual value premium diesel has traditionally enjoyed over petrol has disappeared completely following values of petrol cars climbing markedly.

According to research by BCA, diesel values from fleet and lease sources were on average around 5% higher than petrol values throughout 2006, but in the last few months the gap has narrowed and in some cases petrol-engined cars are enjoying higher premiums.

In April 2007, average fleet/lease diesel values fell by £35 to £7,138, although this figure is still healthy and is the second highest monthly diesel value on record). Petrol values leapt by £400 to £7,542 between March and April.

Overall, the second quarter of 2007 saw petrol averaging £7,319 and diesel cars at £7,014, giving petrol power a 4.3% premium over diesel.

Tony Gannon, BCA communications director, commented “Average diesel values have fallen in each of the last three months although they remain well ahead, year-on-year.”

He added “The long-term price trend clearly seems to indicate a continued narrowing in values between petrol and diesel.”

However, Colin Whelan, business research manager at CAP, said: “While there can be some volatility in the premiums for diesel over petrol we are not seeing any sign of an end to a substantial difference in diesel’s favour.

“In the upper-medium sector, this is still hovering around £600 to £700 and our research suggests that in the retail market there is still stronger demand for diesel engines than for petrol.

“We currently see no reason for this to reverse in the fore seeable future. In the core fleet market we believe the diesel premium remains significant.” Pricewatch: Audi A6 Avant v Volvo V70 Big estate cars are Volvo’s speciality and the manufacturer will be aiming to continue its success in the sector with its all-new V70.

Due on sale in September, the new V70 is based on the S80 executive saloon and blends a huge amount of space inside for both occupants and luggage, with a range of lusty engines.

The 180bhp D5 diesel is the likely biggest seller in SE trim with the Geartronic automatic gearbox, and it faces stiff competition in the prestige sector from the likes of Audi and BMW.

Here we see how the V70 fares against the stylish Audi A6 Avant.

  • AUDI A6 Avant 2.7 TDI SE Multitronic: Price new £30,300

    Mileage Age (months) Predicted value Money lost
    20,000 12 £21,900/72% £8,400
    30,000 18 £19,125/63% £11,175
    40,000 24 £16,850/56% £13,450
    50,000 30 £14,600/48% £15,700
    60,000 36 £12,825/42% £17,475

    Source: CAP Motor Research

  • VOLVO V70 D5 SE Geartronic: Price new £29,130

    Mileage Age (months) Predicted value Money lost
    20,000 12 £22,775/78% £6,355
    30,000 18 £19,925/68% £9,205
    40,000 24 £17,475/60% £11,385
    50,000 30 £15,325/53% £13,805
    60,000 36 £13,475/46% £15,655

    Source: CAP Motor Research
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