Remarketing: ex-fleet diesel demand remains buoyant as used electric vehicle prices rocket
Continuing doubts about diesel, economic uncertainty surrounding Brexit and restricted supply due to WLTP saw another sharp downturn in the UK new car market for the second successive year.
But according to the latest monthly report from residual value experts at Glass’s Guide, the UK used car market continued to perform well, with ex-fleet diesel cars continuing to experience strong demand – although used values softened against petrol-engined alternatives.
“Sales volume, weighted heavily in favour of diesel for this age of car as many are ex-contract hire, shows that they continue to outperform petrol models in terms of conversion rate despite the disproportionate volume of diesel on offer,” said the report. “But when expressing auction prices as a percentage of original cost price, petrol still has the edge.”
And some of the strongest used market performers were pure electric vehicles such as the best-selling Nissan Leaf.
Alternatively fuelled vehicles (AFVs) have doubled their share to account for 6% of the UK new car market in four years. Fleet purchases continue to lead the way – accounting for 60% of total AFV sales in 2018.
According to Glass’s, the primary reasons for private sales lagging behind fleet sales are a lack of public education regarding the benefits of AFVs, more compelling tax incentives for company car drivers and high list prices compared with the petrol or diesel equivalents.
Glass’s analysts believe recent changes to subsidies for AFVs could widen the gap between fleet and retail sales still further:
“With tested increases in CO2 emissions since the introduction of WLTP, it is highly likely that more drivers win the fleet and business sector will switch to AFVs to offset increases in BIK tax,” says the report.
“However, incentives are reducing, with the Government cutting the Plug-in Car Grant for zero emission cars by a third and completely removing the grant for plug-in hybrids. This is likely to influence private retail customers more than fleet and business due to affordability.
“The UK seems to be using the stick rather than the carrot, which could well create a larger divide between retail and fleet buying habits in the coming years.”
The report focuses on the extraordinary used market performance of the Nissan Leaf – the world’s best-selling electric car – whose sales topped 350,000 worldwide in 2018 after the launch of the second generation Leaf.
Used values of the first generation Leaf have increased by almost 20% over the last 12 months – from £8,480 to £10,109 – despite the average age and mileage profiles increasing.
Glass’s analysts said: “It may be some time until electric vehicles are commonplace on the UK roads, but the Nissan Leaf has become the leading environmentally friendly and affordable vehicle available for families around the world. As an EV brand already established in the UK, the Leaf is likely to continue to take a large share of EV business for some time to come.”
Image: Nissan Leaf parked in central London
Author: Mark Sutcliffe