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Is this the end for diesel cars?

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Diesel cars have been the default choice for businesses in recent years, but sentiment has started to change.

There used to be a strong economic argument in favour of diesels.

Yes, they cost more to buy but that was more than offset by higher residual values – which translate into lower lease costs – and superior fuel economy.

The figures varied from model to model but, for many business purchasers, the case for diesels was unanswerable.

So what’s changed?

The revelation in 2015 that 1.2m Volkswagen diesels in Britain had been fitted with software to cheat emissions tests inflicted reputational damage on diesel vehicles in general.

But the main concern about diesels is pollution, and that has precipitated a change in government policy.

According to official statistics from Defra, nitrogen dioxide (NO2) emissions from diesels – which aggravate respiratory problems – are responsible for 23,500 premature deaths in the UK each year.

According to official statistics from Defra, nitrogen dioxide (NO2) emissions from diesels – which aggravate respiratory problems – are responsible for 23,500 premature deaths in the UK each year.

This isn’t just an issue for large metropolitan areas.

Carlisle, for example, has four designated ‘air quality management areas’ where NO2 levels are above the Government’s trigger level, requiring local authorities to take action. These affect Currock Street, Bridge Street, and parts of Dalston Road and London Road.

As you’d expect, London is the worst affected area of the UK for air pollution.

Here the city’s mayor, Sadiq Khan, has announced a £10 ‘toxicity charge’, which will target the most polluting older vehicles every day that they are driven in the capital. It comes into force on October 23.

The Government is expected to introduce a similar charge in up to 35 UK cities, although legislation will not come forward until after the General Election.

These charges won’t affect new diesels, which should meet the latest emissions standards, but they may depress resale values as used car buyers see the direction of travel and decide against diesels.

There is speculation too that heavily-polluting vehicles might be banned from city centres altogether at peak times.

As part of a carrot-and-stick approach, the Government is set to introduce a scrappage scheme for older vehicles, which could see motorists receive payments of £2,000 as an incentive to replace the most polluting diesels.

Transport Secretary Chris Grayling outlined government thinking in a recent interview with the Daily Mail.

He said: “People should take a long, hard think about what they need, about where they’re going to be driving, and should make best endeavours to buy the least polluting vehicle they can.

“I don’t think diesel is going to disappear but someone who is buying a car to drive around a busy city may think about buying a low-emission vehicle rather than a diesel.”

“I don’t think diesel is going to disappear but someone who is buying a car to drive around a busy city may think about buying a low-emission vehicle rather than a diesel.”

So where does that leave businesses?

In purely economic terms, it’s easy enough to compare the lease costs of the equivalent petrol and diesel vehicles.

And the consumer group Which? has a handy online calculator that allows you calculate the annual fuel costs of different models. Click here.

But even if a diesel still makes sense on cost grounds, some businesses are likely to take the view that buying or leasing greener, non-diesel, vehicles will enhance their brand and reputation.

© Cumbria Chamber of Commerce

1 COMMENT

  1. Air pollution, particularly in urban areas, is a major health problem. A study commissioned by the Greater London Authority and Transport for London last year estimated nearly 9,500 people die from long term exposure to air pollutants, just in London. Most premature deaths and respiratory illnesses are caused by nitrogen dioxide emissions and fine particulates called PM2.5 emitted mainly from vehicle exhausts.
    Overall, air pollution from vehicles is estimated to be responsible for around 40,000 premature deaths in the UK every year. EU limits for nitrogen dioxide (NO2) were supposed to have been achieved by 2010, but the UK failed, mainly because Defra still has no credible plan to curb emissions from diesel engine vehicles.
    The upsurge of interest in hybrid and electric vehicles in the last year or so, combined with expected tighter controls on diesel emissions, means that diesel vehicles will be less economically viable in the future.

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