Fleet News

Proposed penalties for non-Euro 6 diesels won’t affect RVs, says CAP

There will be no impact on diesel residual values (RVs) if London adopts a £10 penalty charge for non-Euro6 diesel cars, according to CAP.

However, if a similar scheme were rolled out to other UK cities CAP suggests that demand for non-Euro 6 diesels would be sufficiently dented to impact on used values.

Mark Norman, a senior consultant at CAP, said: "Too few cars are affected by the current proposal to have any impact on demand for diesel cars, whether or not they come under the scope of the envisaged daily £10 charge for entering central London.

"The picture might change if more cities adopt ultra-low emission zones and drivers find themselves paying more penalties but there is still a long way to go before that point.

"Car values are simply not that sensitive to localised factors, as we have already learned from London's existing congestion charge.  If they were we might have seen the values of electric vehicles rising in and around the capital but there is precious little evidence of any difference in residual values between different areas in the country.

"The excitement in the media generated by the announcement of possible penalties for what will be quite old cars by the time this measure is introduced could be misunderstood by motorists.

"If they only hear that diesels in general will be penalised harder than other cars for entering the capital this could conceivably have a small impact, but nothing of sufficient scale to translate into generally lower residual values."


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