The future of diesel cars seems uncertain in 2019. After the double-barrelled blast of increased environmental consciousness and global scandal, it seems like diesel cars are dead in the water.
Today, diesel cars face increased first-year road tax over petrol cars. In addition, owners of diesel cars are faced with emissions surcharges and extra parking fees.
Research shows that this financial crackdown is having an effect. More than 50% of diesel car owners are planning to change their car for a petrol, electric or hybrid vehicle. Nearly all new diesel cars are being discounted by almost 25%, making them cheaper than many of their petrol counterparts.
So what do you do if you own a diesel car? Should you sell now before the price of diesel cars collapses, or do you ride it out? If you’re looking for a new car in 2019, should a diesel car even enter the conversation?
Facts About Diesel Cars in the UK
50.9% of used car sales in 2017 were diesel
Diesel’s share of sales increases by 2% year on year
Diesel vehicles depreciate 2% lower than petrol cars
Diesel cars are 9mpg more efficient than petrol cars
Tax Increases on Diesel Cars
Diesel Car Road Tax
Unlike annual road tax, which is fixed at £140 a year for most cars, first-year tax rates are still based on carbon dioxide (CO2) emissions.
A new diesel car emits between 111 and 130g/km (grams per kilometre) of CO2, making a one-off road tax payment of £160 for the first year, under the old system. From 1st April that same car will cost £200 to tax instead.
It’s also worth pointing out that after the first year of road tax is paid, diesel cars will be charged the same as petrol cars, meaning your £140 annual bill remains the same, whichever of those two fuels you choose.
Benefit-in-Kind Company Car Tax
While the first-year increases are relatively minor, the Benefit-in-Kind rate rise is an annual rolling tax hike for diesel cars – and it’s retrospective. All diesel cars registered on or after 1 January 1998 are impacted, though diesel hybrids are exempt from the increase.
The BiK diesel tax hike came into effect on 6th April 2018. Any new diesel car registered in 2019 is subject to a 1% increase in the diesel tax supplement, from 3% to 4%).
So, if you earn £40,000 a year and drive a diesel Audi A4 and make no employee contributions or payments for private use, you pay £1,840 a year in Benefit-in-Kind rates, as opposed to the £1,737 they were paying previously.
Clean Air Zones
Following on from the government’s UK Air Quality plan, several cities are investigating and setting up cleaner air zones. Many target all combustion vehicles, not just diesel cars. Oxford has gone one step further and proposed a Zero Emission Zone.
The plan would phase out diesel and petrol cars entirely, starting with non-zero emission taxis, cars, light commercial vehicles and buses all banned by 2020 from certain roads, and all non-zero emission vehicles across the city centre by 2035.
Should I Buy A Brand New Diesel Car?
Buying a diesel car in 2019 will mean having to pay tax in a higher band if your vehicle doesn’t adhere to current emissions standards. They can emit no more than 80mg/km of nitrogen oxides per kilometre.
This is problematic due to the fact that it is 1.5-times the current limit of 120mg/km, which means that no new diesel car can currently meet these standards. Since it is not mandatory for carmakers to meet these standards until 2020, there is pretty much no way to avoid this.
In addition, the second-year standard rates on diesel cars are £10 higher than alternative fuel vehicles like hybrids and vehicles powered by bioethanol and LPG.
Vehicles with zero CO2 emissions pay no tax.
When it comes to road tax, there is no benefit to buying a diesel car over other types of cars. If you’re in the market for a brand-new car, it might be worth waiting until 2020, when you can reliably trust that your new diesel car will meet emissions standards.
The biggest issue you need to consider is resale value. Who will want to buy your diesel car when you want to sell it in five years’ time? That is the biggest problem.
Will Diesel Be Phased Out?
Unlikely. The fuel market is huge and diesel still plays a vital role in the motoring industry. The move to regulate and place restrictions on diesel will only spur businesses to develop new fuels that meet modern needs. Diesel is under no worse threat than other fossil fuels, like petrol.
Across the whole market, price reductions on diesel cars are less dramatic than they seem. According to valuation site, cap hpi, larger diesel cars, including SUVs, are expected to hold their value better than smaller vehicles, which are more suited to petrol engines.
If diesel is phased out, it will be as a result of a revolution in renewable energy. In which case, we’ll say goodbye to petrol too. The difference is that diesel is in the spotlight right now.
What Happened To Diesel Cars?
The Rise of Diesel
Back at the end of the Twentieth Century, diesel was celebrated as the solution to rising greenhouse gas emissions. In 1997, 192 countries, including the UK, signed the Kyoto Protocol, a global pledge to reduce greenhouse gas emissions to 12.5%.
To help meet this target, Prime Minister Tony Blair, introduced new vehicle taxes that favoured diesels, thanks to their comparatively low CO2 emissions. When compared to petrol cars, diesel appeared to be the greener solution.
Why were diesel cars considered green?
In the late nineties, electrically injected common-rail fuel systems were being developed for mass production. Pioneered by the Fiat group, but later acquired by Robert Bosch GmbH, the modern common-rail injection was an evolution on technology that had been around since the Sixties.
In principle, common-rail fuel systems use high pressure injections to deliver a large number of smaller fuel droplets, giving a much higher ratio of surface area to volume than lower pressure diesel engines.
This provides improved vaporisation from the surface of the fuel droplets, and so more efficient combining of atmospheric oxygen with vaporized fuel delivering more complete and (most importantly) cleaner combustion than petrol.
The first passenger car to use the common-rail system was the 1997 model Alfa Romeo 156 2.4-L JTD. Later that same year, Mercedes-Benz introduced it in their W202 model and manufacturers never looked back.
By the turn of the century, sales of diesel cars soared from just 19% to a record high of 56% in 2011. Buoyed by moral superiority and promoted by the Government, diesel was set to take over as the fuel of the 21st Century.
Volkswagen and the Fall of Diesel
“Dieselgate” was a scandal that started during the height of diesel car popularity and its ramifications echo down today.
In the early 2000s, as Tony Blair was planning the diesel tax cuts, then chief scientist, Sir David King supported the Prime Minister, despite knowing that diesel cars produced high levels of nitrogen dioxide.
Accusations about testing methods were raised, but car manufacturers assured watchdogs that all was well. The EU was aware that some car manufacturers were using “defeat devices” to cheat exhaust emissions readings. In 2007, they put a ban on these devices.
Four years later, an EU Commission discovered that the levels of harmful nitrogen dioxide emissions in a number of cars were 14 times higher than EU standards. Other studies showed how diesel cars polluted way above levels achieved in a laboratory when under real-world driving conditions. One report found that diesel cars were putting out 25 times the legal limit on the road.
This all came to a head in the USA in 2015. The Environmental Protection Agency accused Volkswagen of installing illegal emission manipulation devices. VW admitted fault, but stayed quiet on the details. But, when the Justice Department started investigating, they uncovered something shocking.
It turned out that for years, Volkswagen was lying about how green their diesel cars were.
More than half a million cars in the US were installed with defeat devices that had been putting out fake readings on emissions tests since 2005. There are even claims that VW’s supplier, Bosch, sent a letter of warning against the illegal use of its technology.
VW’s stock went into freefall and within a month they admitted that defect devices were installed in over 2million cars across the VW range, as well as in Audi and Skoda models.
By the end of 2015, VW recalled over 8.5 million cars, admitting that they had cheated on CO2 emissions as well as nitrogen oxide emissions and were hounded in the courts by governments all over the world.
Court battles raged for the next two years, with VW paying out billions. Allegations against Bosch of being involved in the affair become more substantial, with documents used in a US court saying manipulations in emissions tests had been “an open secret” between VW and its subcontractor.
Volkswagen was stuck with millions of recalled cars and started making changes to them to get them back out into the market. The drive to retrofit older diesel cars helped to create new standards for manufacturing and testing, but it does little to reduce the rise of hybrid and electric alternatives.
Today, the market share of diesel cars in the UK is around 30%. In September last year, diesel received another blow when Porsche announced that it would cease production of diesel cars in favour of electric and hybrid alternatives.
The Future of Diesel Cars
The fallout from ‘Dieselgate’ is still being felt today. It has reshaped Europe’s biggest car maker, accelerated the rise of electric cars and made diesel fuel the a pariah in the eyes of the media.
Plummeting sales of diesel cars have driven Britain’s auto industry to the brink of a crisis. The axe has fallen on thousands of manufacturing jobs and car dealerships have been threatened with savage restructuring.
But with regulation comes innovation. To meet emissions standards, new engines need to be built, which will hopefully help manufacturing jobs in the future. The millions of “bad” diesel cars sitting in Volkswagen warehouses are even now being modified to meet emissions standards, creating a new influx of tested and approved cars to fill up dealerships.
The only way to know for sure is to wait and see. The fate of diesel is yet to be determined, but as long as they’re on the road, we’ll insure them. Contact us today for a quote.