Scrappage scheme proposals could see prices of diesel cars fall at ‘accelerating’ rate

Scrappage scheme proposals could see prices of diesel cars fall at ‘accelerating’ rate

Diesel car supply will increase across the used car market which will see prices drop for second hand models, according to experts. The new proposals will see motorists offered £6,000 to trade in their highly pilluting models for an electric car. However these government incentives could cause a sudden boost in the number of cars available. 

Tom Leathes, CEO of has warned this could have a knock on effect on prices which could dramatically fall. 

He warned prices for polluting diesel cars have been falling faster than models with different fuel types for several years and could now drop even more under the new proposals. 

Motorists desperate to secure the payout while the scheme is in place will be tempted to throw their car on the market. 

This will lower demand for cars as more options will be available meaning vehicles will be available for much less.

READ MORE: Petrol and diesel owners will be affected by scrappage scheme

Mr Leathes told “Diesel prices have been falling at a faster rate for many years compared to petrol, hybrid and electric equivalents.  

“Following further government incentives on the cards allowing owners to trade them in for cleaner options and new legislation extending the boundaries of ultra-low emissions zones, we expect to see a surge in older diesel cars hitting the market. 

“As diesel car supply increases in the used car market, prices of older diesel models will continue to slump at an accelerating rate.”

Despite advances in the electric car market in recent years it is still petrol and diesel sales which drive car production lines. 

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Data from the Society of Motor Manufacturers and Traders (SMMT) revealed petrol and diesel car transactions accounted for 97.9 percent of all used car sales in the first quarter. 

New car sales data from February revealed petrol cars made up 60 percent of sales while diesel equated for 22 percent. 

Fully electric models accounted for just three percent of total sales despite manufacturers starting to focus on the new models. 

The scrappage scheme has been introduced to boost car sales across the UK after figures fell by up to 90 percent during lockdown. 

However, experts at Carwow have urged for the scheme to be extended to include plug-in hybrid models due to the “limited number” of fully electric models. 

Fair Fuel UK director Howard Cox has pushed for the government to “think again” over their proposals which he claims will impact owners of petrol and diesel cars. 

He warned low income motorists would not be able to afford a new electric model even with the £6,000 cash injection as some entry level models cost up to £20,000 each. 

However, Mr Leathes said the changes would mean many would look to “make the leap” to electric vehicles if it was affordable for them.

He said his team would expect the market to grow and predicted a dramatic rise in interest for the second hand electric car industry. 

Mr Leathes told “Anyone looking to change their car right now, especially those living near or within ultra-low emission charges will naturally be looking to make the leap to electric if it’s affordable and practical for them to do so.”

He added: “We expect the second-hand electric car market to grow exponentially in years to come as the stock of EVs on the road grows. 

“There will definitely be a surge in demand for used electric cars too as people will try to get older models for a good price.”

Published at Sun, 21 Jun 2020 07:28:00 +0000