Diesel cars are being moved out of London and into the north of England and Scotland after a crackdown on emissions in the city.
Vertu Motors, one of the UK’s largest car dealers, is responding to London Mayor Sadiq Khan’s expansion of the ultra-low emission zone by shifting diesel vehicles to areas outside the UK capital, according to Chief Executive Officer Robert Forrester.
The expanded ULEZ is also hitting the value of diesel cars that just miss out on being exempt from charges, according to data from Auto Trader, a listing site for used vehicles. Under the new system, aimed at improving London’s air quality, motorists whose cars do not meet emissions standards, including most diesel automobiles registered before 2015, have to pay a daily charge of £12.50 ($15.18) just to leave their driveway.
Diesel cars remain popular elsewhere in the UK because they tend to be cheaper to run over longer distances and because there are no ULEZ-style restrictions, Forrester said.
“We are moving cars from the south to the north,” said the CEO of Vertu, whose brands include Bristol Street Motors. “Normally you make money going the other way because you can get more money for cars in the southeast of England than you can for cars in Scotland. So we tend to ship cars south if you want more money, but there definitely has to be a shift of cars from south to north now, because who the hell wants one in the south of England?”
ULEZ Expansion
Plans for ULEZ were first proposed by former Mayor Boris Johnson in 2015, but it was his successor Khan who introduced the initial restrictions in central London in April 2019. The zone was expanded in October 2021, but the latest extension, which took effect in August and covers the whole of Greater London, has proved the most controversial.
Critics have said it penalizes suburban residents who are more reliant on cars to get around because the public transport infrastructure is not as good as in central London. Khan has described ULEZ as the “best-ever two-for-one offer you will ever receive,” because he says it tackles both air pollution and climate change.
Second-hand diesel cars registered just before the 2015 cut-off to comply with London’s low-emissions regulations have lost more value than the average diesel car since Khan unveiled his expansion plans last November, data from Auto Trader shows.
The average price of the 10 most viewed models of diesel cars that narrowly miss the 2015 cut-off fell by 9.5% in the year to August. By comparison, the average price of a diesel car actually rose by 3.1% in that period.
The biggest drop was a 14.1% fall in the average price of a 2012 Audi A3 diesel model, which fell from £7,084 in August 2022 to £6,085 in August this year – a £999 decline. The average price of a 2014 Range Rover Sport diesel decreased by 13.8% to £24,973.
Market Distortions
The ULEZ expansion has caused “some distortions” in a generally buoyant secondhand car market, according to Ian Plummer, commercial director of Auto Trader.
“Since Sadiq Khan announced the extension at the end of November last year, some models have fallen by 10% or more – almost £3,000 in some cases,” he said.
The fall in the price of some cars is in stark contrast to the secondhand market during the pandemic, when prices soared as supply-chain issues caused a shortage of brand new cars.
Many people like to browse sites such as Auto Trader to search for their dream car without any intention of actually buying it, meaning the 10 most viewed models are not necessarily the ones most frequently bought.