DIESEL car residual values are being hit by their declining popularity among fleets and uncertainty over future Government policy on which fuels companies should favour. The traditional price premium diesel models had over their petrol counterparts has been all but wiped out in some cases and leasing companies have recorded a steady drop in the number of diesel vehicles on their fleets.

Used car guides CAP Black Book and Glass's Guide say they have seen a cut in the price of diesel vehicles. The news comes as new diesel sales recorded a significant dip in April. Evans Halshaw Fleetcare, the Birmingham-based contract hire company, says over the past three years it has seen the proportion of its fleet made up of diesels cut dramatically as customers demands change.

And Richard Pepper, managing director of BCH Vehicle Management, which has a fleet of 15,300 vehicles, said: 'Diesels are around 8% of the fleet compared with 10% a couple of years ago. It is partly because there is no longer any advantage in the fuel cost of diesel. Common-rail diesel technology might help in future, but I think the problem lies in people thinking it is not a particularly clean fuel.'

CAP says a three-year-old Ford Mondeo 1.8LX TD five-door with 60,000 miles on the clock would have fetched £5,350 in June last year. By June this year that price had dropped to £5,225. A spokesman for Glass's said: 'There has been no growth in the new diesel market when the market as a whole is up 7%.'