The expansion of London’s Ultra Low Emissions Zone has renewed the focus on ensuring vehicles are compliant
From 25 October, the London Ultra Low Emission zone is expanding from the current Congestion Charge zone to take in everywhere inside the north and south circular roads, a huge expansion that takes in large areas of residential outer London easily visited by car.
The new rules apply to diesel vehicles not adhering to Euro6 regulations and petrol models that must meet Euro4, which is impacting the used market.
“Remarketing demand for vehicles suitable for Low Emission Zones remains strong, reflecting the generally excellent levels of demand seen for used stock during 2021,” says BCA COO UK Remarketing Stuart Pearson, who also said that the current issues around new car supply have led to high demand for all used vehicles.
But understanding of the issues around low-emissions zones is, predictably, varied across the country.
“Generally, the London consumer is very knowledgeable because they have had a congestion zone for many years, while the Oxford driver will know that the city prefers you to leave the car at home or park on the outskirts and get a bus into town, but outside of these areas the knowledge is very low,” says Alex Wright, managing director of Shoreham Auctions. “It will be interesting to see how fast the Birmingham consumer catches on to the benefits of running a car that will avoid the new LEZ”.
Wright says pre-Euro6 diesels are not suffering yet, and are being purchased by used car retailers in “rural dealers where emissions zones are never likely to be introduced, such as Somerset”.
WHERE TO WORRY ABOUT
While the London expansion is grabbing headlines as the biggest low-emissions zone the country has yet seen, other areas have introduced or are planning zones restricting or fining vehicles that don’t comply with varying standards.
l Birmingham – launched on 1 June 2021
l Oxford – Pilot began in August 2021, larger zone due in 2022
l Bristol – currently consulting on plans
l Greater Manchester – vans charged from 2023
Others including Liverpool, Newcastle, Portsmouth and the four Scottish cities of Aberdeen, Dundee, Edinburgh and Glasgow are also in various stages of consultation around launching schemes.
EURO6 VAN DEMAND SET TO SPIKE
The new London Ultra-Low Emission Zone is likely to cause a spike in demand for Euro6 vans, which make up around 60% of the wholesale stock hitting the market, according to Glass’s chief commercial vehicle editor, Andy Picton.
“There is currently demand for every age of vehicle, such is the shortage of supply to the used market, with the nicest Euro5 vehicles still commanding strong prices,” he told Company Car Today.
“However, the price gap (between Euro5 and Euro6 vans) is starting to widen as more clean-air zones are introduced, making non-compliant vehicles less attractive.”
He says stock volumes are likely to remain subdued for the rest of this year, leading to demand for the cleanest Euro 6 stock outstripping supply and resulting in a likely increase in values.
Meanwhile, Alex Wright of Shoreham Vehicle Auctions says that used van dealers in the London area are buying only Euro6 stock, and pre-Euro6 stock is being acquired by those outside of the capital, although all vehicles are currently finding a home because of the shortage of stock.
BCA COO UK Remarketing Stuart Pearson on LEZs affecting used buyers
1. Hybrid the hotspot for LEZ compliance…
Hybrids remain the dominant and in-demand choice for used buyers purchasing eco-friendly, LEZ-compliant cars. Hybrids are more established with motorists, and plug-in hybrids continue to grow in popularity as they offer cheap electric-only power for short trips, yet longer journeys are easy thanks to their petrol or diesel engines.
2.…but EV acceptance continues to rise
There continues to be improving levels of demand from professional buyers for EVs. Knowledge and confidence in the product has definitely increased, however an accurate valuation remains key in a dynamic market.
3. Can’t be missing cables.
BCA works with sellers to minimise issues such as missing cables, keys and paperwork and ensure the vehicle is charged and ready for sale. Making sure EVs/PHEVs are supplied with the correct charging cable is critical as official replacements can cost several hundred pounds.
4. LEZ areas focus on compliant vans.
The proposed widening of low-emission zones across the UK has naturally focused commercial vehicle buyers towards Euro6 LCV models. There are clearly defined benefits for Euro6 vehicles, which places a premium on them.
5. Not everyone needs to make the change yet.
For the average self-employed tradesman or small business, a reliable and cost-effective transport solution to support their business is most important; if they are not entering low-emission zones then a Euro5 or earlier model could meet their needs.