Buying and leasing

Emissions scandal – is now a good time to buy diesel?

ANALYSIS
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A question mark hangs over whether diesel cars are currently worth buying. Source: iStock / luckyraccoon

The scandal of emissions rigging, potential bans in German cities and forthcoming software retrofit programmes – all this is turning up the heat on diesel engines and raising the question of whether it's still worth buying a diesel right now. After all, until recently, the diesel-powered car was the shining star of the vehicle world for Swiss motorists. 

In 2015, diesel cars accounted for almost 40 per cent of all new cars purchased in Switzerland, the top seller being the diesel model of the Skoda Octavia. However, while the proportion of diesel vehicles purchased fell by 2 per cent in 2016, it actually dropped by a fifth in April 2017. This growing scepticism towards diesel engines was also highlighted by a Comparis study carried out in March 2017. 

Amid the demise of the diesel, there are arguments both for and against buying a vehicle with this type of engine. 

The pros

  • Buyers are in a strong position: Various sources (e.g. German car marketplace mobile.de) have calculated that the price for a new diesel in Germany in 2017 is around 10 to 20 per cent lower than it was in 2016. Even though the price drop appears to be less dramatic in Switzerland, this nevertheless gives buyers a clear psychological advantage when it comes to negotiating.
  • Faster pay-off: For a long time, 15,000 kilometres was considered the cut-off point – if you drove further than this per year, then a diesel was worth it. With a lower purchase price, a diesel should also pay off if you drive less than this. However, you do need to keep an eye on the vehicle's resale value.
  • New models: New models complying with the stricter Euro 6d-TEMP emissions standard are set to arrive on the market in autumn 2017. If you are contemplating buying a new diesel vehicle, you should opt for one that meets these new emissions criteria.
  • Trade-in and scrappage incentives: Carmakers like Ford, BMW and Opel are offering attractive incentives ranging from 2,000 euros to as much as 8,000 euros to anyone switching their old diesel for a cleaner model. These offers are also available in Switzerland.
  • Better fuel consumption: Diesels used to consume 30 per cent less fuel than petrol engines. This margin has narrowed since the improvement of petrol engines, but is still around 20 to 25 per cent.

The cons

  • Plans to ban diesels: German cities are introducing the first driving bans. Hamburg, Stuttgart and Munich could have them in place as early as next year. Other cities may well follow. According to a Comparis study, 50 per cent of the population considers diesel bans a possibility in Switzerland too.
  • Loss of value: A poor reputation, decreasing demand and legal uncertainties will inevitably affect prices. Experts forecast a loss in value of approximately 20 per cent for diesel vehicles in the medium term. Indeed, half the respondents in a Comparis study expect diesel vehicles to decrease in value.
  • Loss of reputation:  Since the VW emissions scandal, diesel vehicles have come to be seen as air polluters and consequently suffered a significant hit to their reputation. According to the above survey, one in two people in Switzerland also fear the diesel engine will decrease in popularity.
  • Environmental impact: Even the latest Euro 6 diesels emit six times more nitrogen oxide than is permitted, according to the German Environment Agency. Nitrogen oxides cause cancer and are associated with problems such as asthma and cardiovascular diseases. In addition, nitrogen oxides are precursors to the formation of acid rain, particulate matter and ozone.
  • Fuel price no cheaper: While there are still tax advantages to be had by filling up with diesel in Germany, Austria and France, prices in Switzerland are the same as 98 unleaded petrol, according to surveys by Touring Club Switzerland (TCS) (1.58 francs per litre as of April 2017). And if you use 95 unleaded petrol at 1.52 francs per litre, you even save 6 centimes compared to the diesel price of 1.58 francs per litre. 

So where does the ADAC, Europe’s biggest automobile club, stand with regard to buying diesel? Its experts currently advise a wait-and-see approach. Political pressure on diesel carmakers is enormous. In Germany, discussions are under way to increase tax on the fuel. 

It’s possible that the price of diesel vehicles will fall further, at least on the used car market. The reason for this is a possible influx of company and fleet vehicles for sale in the coming two years, according to TCS. This is when many vehicles purchased or leased during the popular years of 2015 and 2016 will be released onto the used car market, potentially putting pressure on used car prices.