Used diesel cars are becoming increasingly difficult for dealers to shift, with stock taking significantly longer to sell than hybrid and electric alternatives as rising fuel costs put further pressure on demand and residual values.
New figures from Solera Cap HPI show diesel vehicles took an average of 41 days to sell during September, compared with 32 days for hybrids and 33 days for battery electric vehicles (BEVs).
The widening gap comes as separate data from Autotrader reveals demand for used diesel cars fell 19.2% year-on-year in September, considerably faster than the 6.8% contraction in supply.
The imbalance suggests retailers face growing pressure to price diesel stock competitively as weakening consumer appetite threatens to extend stocking periods and erode margins.
Solera Cap HPI’s latest figures show diesel values at three years and 30,000 miles have fallen 6.9% over the past 12 months, with the decline becoming more pronounced since March.
At three years and 60,000 miles, diesel values fell a further 0.6% in October, making diesel the weakest-performing fuel type for five consecutive months. By comparison, hybrid values increased 0.5% in October, while BEVs recorded a 0.3% rise.
Fuel prices add to diesel stocking pressures
The deterioration in diesel demand coincides with sharply rising fuel costs, with pump prices reaching around 195p per litre, approximately 23p more than petrol.
Filling an average-sized diesel tank now costs around £105, while the RAC has warned that prices have already exceeded £2 per litre at some forecourts.
Chris Plumb, head of current valuations at Solera Cap HPI, said the impact on used diesel values had accelerated during the spring and summer.
“Over the past 12 months, values at three years and 30,000 miles have fallen by 6.9%, and the trajectory shows how quickly buyer sentiment towards running costs can feed through into used car prices.
“Diesel at around 195p a litre is difficult for buyers to ignore, particularly when they are comparing it with hybrid and electric alternatives. Retailers are seeing that reflected in demand, with diesel stock needing to be particularly desirable or competitively priced.”
Demand falls faster than supply
Autotrader’s latest Retail Price Index provides further evidence of the challenge facing diesel retailers. While used diesel demand contracted 19.2% year-on-year in September, supply fell by just 6.8%, leaving a growing mismatch between the number of vehicles available and consumers looking to buy them.
Like-for-like diesel retail asking prices declined 0.8% year-on-year to an average £13,924. By contrast, demand for used electric cars increased 40% over the same period, outstripping supply growth of 26% and helping support a 2.8% annual increase in EV retail prices.
The contrasting performance suggests dealers will need to be increasingly selective when acquiring diesel stock, particularly where vehicles lack the specification, condition or pricing needed to attract buyers in a weakening market.
Marc Palmer, head of strategy and insights at Autotrader, said dealers needed to look beyond overall market averages when making pricing and stocking decisions.
“September highlights just how important it is to look beneath the market averages,” he said.
“Overall prices have softened, but different cars are experiencing very different dynamics. Demand for electric cars is comfortably outpacing supply, supporting continued price growth, while record fuel costs are adding pressure to traditionally fuelled cars, particularly diesel.”
Focus on individual vehicle demand
The pressure on diesel comes despite relative stability across the wider used car market.
Solera Cap HPI reported an average 0.3% fall in used values at three years and 60,000 miles in October, equivalent to a little over £90.
Autotrader similarly recorded a relatively modest 1% annual decline in overall used retail prices during September, with vehicles taking an average of 29 days to sell, unchanged from a year earlier.
However, the substantially longer selling period reported for diesel by Solera Cap HPI illustrates how the performance of individual fuel types can diverge from broader market conditions.
For dealers, the risk is that diesel vehicles acquired at prices reflecting historic levels of demand could require additional discounting or remain on forecourts longer than anticipated, increasing holding costs and putting pressure on retained margins.
Palmer said retailers should avoid relying solely on movements in wholesale values when setting retail prices.
“Cars are still selling quickly and there are clear pockets of pricing strength, so for retailers sourcing well in a softer wholesale market, there remain opportunities to protect margin by pricing individual vehicles to real-time retail demand.”
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