Should you lease a diesel vehicle in 2018?



Cars with diesel engines have come in for their fair share of criticism recently.

But are new diesel cars as bad as politicians and the media like to make out? And why should you lease a diesel vehicle instead of purchasing one.

We try to answer all your questions in this blog post.

The problem with diesel

Public opinion has quickly and decisively swung against diesel vehicles. Seemingly in the space of a few months, diesels went from politicians’ preferred fuel type to the cause of dozens of society’s problems.

Figures from the Society of Motor Manufacturers and Traders (SMMT) showed that diesel car sales fell by 37% this March compared with March 2017.

Diesel cars were favoured by successive UK governments because they have lower CO2 emissions and better fuel economy.

Accordingly, diesel drivers benefitted from lower road tax and company car tax, which boosted demand.

But as public attention slipped from greenhouse gas emissions to air quality and pollution in cities, diesel vehicles have come under increased scrutiny.

Under pressure from the European Union, Chancellor Philip Hammond announced last year that diesel vehicles registered after 1 April 2018 would be moved up a tax band in their first-year vehicle excise duty rate.

It is worth noting that these extra charges apply to new vehicles. People who own diesels will not face any additional taxes.

Diesel cars that meet the Euro 6d air quality standards are exempt from this increase, but the Low Carbon Vehicle Partnership claims that there are no new diesel cars on sale that meet this stricter standard.

The amount that new diesel drivers pay will depend on which vehicle they purchase or lease.

Someone buying a typical Ford Focus diesel, for example, could expect to pay an extra £20. A Volkswagen Golf buyer will pay £40, a Vauxhall Mokka £300, and a Land Rover Discovery £400.

Diesel-powered company car drivers would also face a benefit-in-kind supplement tax increase from 3% to 4%.

Why you should lease a diesel vehicle

Despite the negative headlines, and the removal of incentives, diesel cars are still a good option for some drivers.

Lower CO2 emissions and better fuel economy suits drivers with high annual mileage and drivers who do a lot of motorway driving.

Diesel cars are not suitable for people who do a lot of stop-start town-based driving.

Diesel engines are not terribly efficient in these circumstances and low-speed urban driving can damage your car’s diesel particulate filter.

But national efforts to improve air quality will cause diesel cars to fall in value.

This doesn’t just include the potential for new taxes on diesel vehicles. It also includes local schemes like London’s Ultra Low Emissions Zones, which can charge vehicles up to £12.50 per day to drive on certain roads in the capital.

Other towns and cities across the UK are in the process of implementing similar schemes.

The value of diesel cars has also been affected by the success of lease financing, an oversupply of second-hand diesels, the VW emissions scandal and the growth of electric vehicles.

By leasing a diesel (or petrol) car, you avoid some of the risk associated with your car plummeting in value.

If the second-hand value of the diesel car has fallen by the time your lease has expired, you can just hand the car back without incurring any losses.

For more information on vehicle leasing, speak to a member of our team today. Call: 01925 713 212.

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