The percentage of diesel cars entering the used car market has increased from around 15% of all cars sold to 35% in the past seven years.

Meanwhile, petrol has fallen by a similar amount to around 65% of all used cars sold, according to Cap.
This growing trend reflects findings from the FN50 survey, which revealed the proportion of diesel orders had increased from 72% in 2009 to 79% in 2010.

Although, with cleaner petrol models being launched in greater numbers this is a figure that could fluctuate in the future.

Greater use of direct injection technology, downsized engines and turbo-charging has resulted in far more efficient petrol engines available now than just a few years ago.

Nevertheless, what does this growing number of diesels mean for the used car market now?

The latest price data from BCA shows that fleet and lease diesel cars continue to enjoy a substantial price premium over petrol despite the differential in fuel costs, and that the diesel cars were sold at a higher average mileage.

The premium narrowed at the start of 2009 but has widened again in recent months and in September 2010 was as wide as it ever has been at over £1,400, say BCA.
Tony Gannon, BCA communications director, explains:

“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 for the used car market report shows that they also value diesel’s perceived relative economy in terms of mpg and lower servicing costs.”

However, with diesels being so prevalent in the fleet arena, there’s little fleets can do to make these vehicles stand out, beyond preparing them to a high standard and carrying out any repairs that might be required.

“Diesels tend to be sold at a higher mileage so cosmetic damage – stone chips, bumper scrapes, kerbed alloys – is more likely and is worth addressing,” adds Gannon.

Speaking at the Vehicle Remarketing Association’s (VRA) inaugural conference, Mark Norman, operational development manager at Cap, explained how the used car parc had changed quite dramatically over the previous few years.

Norman says: “The number of diesels has increased massively over the past few years, while petrol has decreased.

“This has been driven primarily by the change to a CO2-based taxation, which made the company car driver stop assuming bigger is better.

“It’s certainly not that drivers have been necessarily concerned with the green agenda, it’s been about saving money.”

Legislation affecting fleets has been the major contributory factor and Norman said this would be reflected in the future.

“Big changes in the used car marketplace will again be driven by legislation which will feed into fleets changing model mixes that in turn will slowly feed through to the used car market,” he explains.

CO2-based company car taxation is already starting to influence average emissions on the used car parc.

Cap data shows that in 2003 around 5% of all used cars sold were sub140g/km compared to around 18% of the market now, while vehicles with emissions over 185g/km have decreased from around 38% to 25% during the same time frame.

Norman says: “We are starting to get more and more sub-140 vehicles into the used market, but it is slow and is taking time to impact the overall car parc.”

Meanwhile, hybrids still only account for around 0.2% of the overall market, but have increased their share in the past two years.

In what Norman describes as the emerging sectors, 4x4s, Mini MPVs and MPVs have all grown over the past few years. For example MPVs have doubled their share of the used car market from 4% in 2003 to 8% today.

“However, what has seen spectacular growth is what I class as executive,” says Norman. “These are the executive German marques - BMW, Mercedes and Audi.

“They’ve increased from 8% of the market place to 12% meaning that at some stage people may start questioning the exclusivity of those vehicles.”

And with Audi, Mercedes-Benz and BMW accounting for 16% of the overall fleet market in 2010, Norman’s prediction could ring true at some point in the future.