Open a newspaper or surf the web for just a short time and the chances are you’ll come across a news story about how diesel cars are killing us all, thanks to their heavily toxic emissions. It’s so unfair. After all, we were coerced into buying diesel-powered cars thanks to their low CO2 emissions and now we’re being told that those same cars are pariahs because they’re destroying our air quality.
At this point it’s worth reading our blog on emissions standards for new cars, because if you believe everything you read in the media you’ll assume that diesel cars really are the work of the devil. The reality of course is that the latest models are incredibly clean – the problem is that there are millions of older cars out there being used every day, which are nothing like as clean.
With the average lifespan for a car in the UK a little under 14 years, and with the latest rules having come into force less than a couple of years ago, it’s going to take a long time to rid our streets of the dirtiest motors. In a bid to speed up the process there’s talk of a diesel scrappage scheme being introduced, but how many people will be able to afford to throw away a car that may have years of faithful service left to give would remain to be seen.

In the meantime, you need to work out what car to buy. A year ago we tackled the same topic and in that blog we looked at all of the key considerations; the driving experience, the relative costs, the green argument and reliability. None of those things have changed so it’s definitely worth reading that article to get the background on which way to turn.
It’s also worth downloading a copy of our exclusive new report which compares petrol and diesel cars. The report, which you can download for free, explains why diesel cars became so popular, why they have fallen out of favour and what the future holds.
The future’s green?
What’s obvious is the fact that diesel technology is falling out of favour, but don’t be too quick to assume that it’s dead. It took 15 years for diesel sales to build up to accounting for half of the UK new-car market and while it’s predicted that this will eventually drop to less than a third, it will take several years to fall to these levels.
Some segments will tail off faster than others, largely because there aren’t the alternatives yet. For example, diesel-powered SUVs will continue to be popular because the petrol alternatives are too thirsty and don’t have the muscle that these big, heavy vehicles require. But once there’s a decent array of petrol-electric hybrid alternatives to choose from, buyers will probably migrate to those instead.
At the other end of the scale, the smallest cars already cost too much in diesel form. The premium you pay for diesel over petrol makes no economic sense which is why in 2016 just 350 diesel-engined city cars were sold – compared with a whopping 216,000 petrol-engined examples. To save you reaching for your abacus, that’s just 0.16 per cent of the market. Or to put it another way, for every diesel-engined city car sold, there were 617 petrol-engined examples.
Counting the cost
Diesel cars are significantly more complicated than their petrol equivalents which is why they cost more. With large, expensive models this extra cost accounts for a relatively small proportion of the car’s value, making it easier to justify. But when a car is worth significantly less the harder it is to justify this extra cost.
The thing is, the initial purchase price is the cost that buyers almost always focus on, along with the fuel and road tax costs. What they are unlikely to even consider is the depreciation rate or the likely maintenance bills and these can make a big difference to the overall running costs of a car – to the point where something that seemingly makes sense purely in financial terms, no longer makes sense.
Until now there has been a healthy demand for both new and used diesels, and that demand isn’t going to just fall away overnight. But it’s likely that the move away from diesels will gain momentum; as demand slows, the values of diesel cars will fall which will push up the cost of ownership. Once this starts to bite demand will fall further, cutting used values even more.
While increased road and fuel taxes for diesels are bound to have an impact on demand, diesel’s golden age is almost certainly already over because many owners have realised that such cars aren’t cheaper to run than petrol models. While fuel bills are invariably lower, when you look at the total cost of ownership the picture can be very different.
For example, when CAP-HPI did some number crunching to compare a Volkswagen Golf 1.6 TDi with its 1.0 TSI petrol equivalent, the results were revealing. With similar power outputs, both cars are rated at 99g/km of CO2 but the TDi costs a hefty £1585 more to buy than the TSI, which represents a 7.65 per cent premium. Maintenance costs are almost identical for the two variations on the theme but at resale time the diesel is expected to shed an extra £1535. Over 30,000 miles and three years the TDI is expected to save its owner just £240 in fuel costs, which means the Golf TDI costs £1301 more to run over three years than its TSI counterpart.
So before you buy that new car, think about the motoring landscape when you come to sell it. Pay a big premium for a diesel now and the chances are that when you come to sell it, you may get less for it than if it had a petrol engine – although what type of car it is will make all the difference here. What we don’t know yet is how heavily diesel-engined cars will be taxed in the coming years, and that’s what is going to make all the difference.
The future’s green?
What’s obvious is the fact that diesel technology is falling out of favour, but don’t be too quick to assume that it’s dead. It took 15 years for diesel sales to build up to accounting for half of the UK new-car market and while it’s predicted that this will eventually drop to less than a third, it will take several years to fall to these levels.
Some segments will tail off faster than others, largely because there aren’t the alternatives yet. For example, diesel-powered SUVs will continue to be popular because the petrol alternatives are too thirsty and don’t have the muscle that these big, heavy vehicles require. But once there’s a decent array of petrol-electric hybrid alternatives to choose from, buyers will probably migrate to those instead.
At the other end of the scale, the smallest cars already cost too much in diesel form. The premium you pay for diesel over petrol makes no economic sense which is why in 2016 just 350 diesel-engined city cars were sold – compared with a whopping 216,000 petrol-engined examples. To save you reaching for your abacus, that’s just 0.16 per cent of the market. Or to put it another way, for every diesel-engined city car sold, there were 617 petrol-engined examples.
Counting the cost
Diesel cars are significantly more complicated than their petrol equivalents which is why they cost more. With large, expensive models this extra cost accounts for a relatively small proportion of the car’s value, making it easier to justify. But when a car is worth significantly less the harder it is to justify this extra cost.
The thing is, the initial purchase price is the cost that buyers almost always focus on, along with the fuel and road tax costs. What they are unlikely to even consider is the depreciation rate or the likely maintenance bills and these can make a big difference to the overall running costs of a car – to the point where something that seemingly makes sense purely in financial terms, no longer makes sense.
Until now there has been a healthy demand for both new and used diesels, and that demand isn’t going to just fall away overnight. But it’s likely that the move away from diesels will gain momentum; as demand slows, the values of diesel cars will fall which will push up the cost of ownership. Once this starts to bite demand will fall further, cutting used values even more.
While increased road and fuel taxes for diesels are bound to have an impact on demand, diesel’s golden age is almost certainly already over because many owners have realised that such cars aren’t cheaper to run than petrol models. While fuel bills are invariably lower, when you look at the total cost of ownership the picture can be very different.
For example, when cap-hpi did some number crunching to compare a Volkswagen Golf 1.6 TDi with its 1.0 TSI petrol equivalent, the results were revealing. With similar power outputs, both cars are rated at 99g/km of CO2 but the TDi costs a hefty £1585 more to buy than the TSI, which represents a 7.65 per cent premium. Maintenance costs are almost identical for the two variations on the theme but at resale time the diesel is expected to shed an extra £1535. Over 30,000 miles and three years the TDI is expected to save its owner just £240 in fuel costs, which means the Golf TDI costs £1301 more to run over three years than its TSI counterpart.
So before you buy that new car, think about the motoring landscape when you come to sell it. Pay a big premium for a diesel now and the chances are that when you come to sell it, you may get less for it than if it had a petrol engine – although what type of car it is will make all the difference here. What we don’t know yet is how heavily diesel-engined cars will be taxed in the coming years, and that’s what is going to make all the difference.
Richard Dredge
May 2017