The non-premium, medium sized car segment remains very popular with car buyers. Some of the UK’s most popular cars sit within this segment, the Ford Focus, Volkswagen Golf and Vauxhall Astra. These three models alone account for more than half of the segment’s volume. Better than most, this segment has survived the rigours of change and has shown resilience, despite the emergence of the hugely popular C-SUV sector. It has likely benefitted from the decline in the non-premium D segment (Mondeo size). A segment that appeals to the masses, with versatility of size and of offerings, with many models having an estate option.
At 3 years and 36,000 miles, Glass’s Trade data shows the very best residual value performers are the petrol variants of the Volkswagen Golf that retain around 50% of their original cost new price. The diesel variants perform less well, due to the high volumes that are part of the new car sales success. The chart below shows the top ten models sales by volume. As expected, over the past 24 months, petrol models have improved their residual value positioning whereas diesel, in the main, shows slight decline.
Interestingly, the 2015 registration volumes for some models were heavily in favour of petrol variants, such as the Nissan Note and Vauxhall Astra, whereas others, such offerings from German, French and Korean manufacturers were weighted towards diesel. As we now know, the shift away from diesel in the new car market has been significant. This change is most likely to result in changes in the medium car sector, where previously demand for diesel has been high, especially from customers who cover high mileages.
Another factor here is that a high number of retail buyers who were not covering average, let alone high miles, mistakenly thought diesel was the right option for them. Now it seems that the market is redressing this balance.
Whilst clearly petrol models are performing well in the current used market, diesel appears to be holding-up well. We do not anticipate that diesel values will suffer any kind of crash, which will come as some comfort to many diesel owners.