Fleets are being warned that the premium used diesel cars are achieving against their petrol counterparts is falling rapidly.

Since the start of the year, the premium an ex-fleet diesel car has achieved over a petrol counterpart has fallen from nearly £1,000 to around £500, according to BCA.

This means an ex-fleet diesel car is now achieving just 11% more at auction than a petrol equivalent.

“We would agree with BCA’s observation that a reduced premium is being obtained on diesels at auction,” said Mark Chessman, deputy managing director Lloyds TSB Autolease (LTSBA).

“The main driver behind this is most likely the increased diesel pump prices in 2008, rather than a fall in demand for diesels.

"The price of diesel has, of course, reduced since it reached a maximum in mid to late-2008, so we may see a bounce back.”

Fleets have been buying more and more diesel cars for several years thanks mainly to their better fuel economy.

For example, over 80% of LTSBA fleet vehicle parc is diesel, and the majority of its fleet customers – 61% - specify that all their vehicles must be diesel only.

The impact of the narrowing of the gap between diesel and petrol cars at auction on some fleets will be immediate: “If a fleet has an agreement with its leasing provider that any profit on the disposal of the vehicle will be shared, it will mean that the eventual proceeds on sale are likely to be reduced and therefore the element of profit is going to be less,” explained fleet financial expert Alastair Kendrick.

And fleets that lease their vehicles will also suffer in the future.

“It is likely that this will mean that the cost of these cars will prove more expensive to lease seeing the whole life costs will have increased,” said Kendrick.

The dramatic rise in diesel car ownership goes someway to explain the fall in the premium they can fetch at auction.

With so many diesel cars coming off fleet, there is more choice for the retail buyer and therefore they can expect to pay a lower price.

“The volume of diesels on the used market has contributed to reducing the traditional premium over petrol cars,” explained Simon Harris consumer editor at Parker’s Car Price Guide.

“On a smaller car, such as the Citroen C1, a diesel would be lucky to fetch £100 more at auction at three years old, while the premium on these cars when new was about £1,000.”

However there is more to the phenomena, as Tony Gannon, BCA communications director explained: “What is certain is that there are a number of factors affecting the relative price performance of the two fuel types in the used car market.

"The price paid by motorists at the pumps is significant, and will affect desirability.

"But motorists don’t consider this in isolation – our research shows that they also value diesel’s perceived relative economy in terms of mpg and lower servicing costs.”

Gannon suggests that as fleets have registered increasing numbers of diesel cars, it is tempting to suggest that used fleet diesels will continue to get cheaper.

“However, the market dynamics are not that simple,” he said.

“If motorists follow the lead set by fleet operators – as they inevitably do – we could see increasing demand for used diesels matching the rising supply of stock available to the market.”

Residual experts at CAP say they have not seen a major change in used diesel premiums.

“In some cases there has been a reduction while in others a slight increase has taken place,” explained spokesman Mike Hind.

“Despite the fact that most corporate fleets are now more than 80% diesel, used car buyers remain sufficiently convinced of diesel’s benefits to ensure there is no comparative oversupply.”