BCA CCT Knowledge LogoEuropean emissions standards affect us all, and new clean-air zones mean six really is the number you need to know.

City low-emission zones are going to be increasingly big news nationwide over the coming years, with Birmingham next to join London and others to follow. Many will draw the line at Euro6 for diesel and Euro4 emissions standards for petrol. If your vehicle doesn’t meet those levels of efficiency, you’ll face a charge to enter the cities.

Louise Wallis - head of NAMA - National Association of Motor AuctionAwareness is increasing, although “patchy in places” according to Louise Wallis, head of the National Association of Motor Auctions (pictured right). “The low-emission zone has had an impact in the London area,” she says.

But that doesn’t mean the industry as a whole is on board with the difference between Euro5 and Euro6. “Before the introduction of the [London] ULEZ in April, there was no focus from the buyer network on Euro5 to Euro6,” says Cap HPI senior editor, commercial vehicles, Steve Botfield. “Without industry knowledge in some instances, it is impossible to distinguish the difference. On top of this, very few manufacturers badged the vehicles accordingly so it does cause some confusion as identical vehicles on the same plate could have slightly differing Euro standards.”

“More could be done by Government,” agrees NAMA’s Wallis. “They do need to make it clear that there are diesel options out there that meet the [ULEZ] criteria.”

But the motivation for switching to Euro6 remains financial, rather than picking a greener vehicle, according to Wallis. “People aren’t worried about clean diesel unless it will hit their pocket; people tend to choose money over the environment,” she continues. “They like to make a green choice if they can but cost is the main driver.”

 

VAN VARIANCE BIGGER THAN FOR CARS

Light commercial vehicles are more sensitive to the difference between Euro5 and Euro6 diesels, due to a combination of factors, including the increased presence of diesel in the LCV sector and the awareness of the business cost of going into low-emissions zones.

“There is a clear difference in values and particularly in demand, there’s a very strong monthly indication that CV sales are being driven by Euro6” says NAMA’s Louise Wallis.

“If you’re buying for the next two or three years, then you need to do some future-proofing, so there is a knock-on effect nationwide as well as in the south east.”

But some of that geographical impact is negated by increased buying using web auctions. “With the introduction of online routes to market, buyers and second owners can source vehicles from any UK location,” says Cap HPI’s Steve Botfield. “Sales location has, to some degree, become immaterial provided it is the right van.”

 

DIESEL DEMAND

Derren Martin, head of valuations, Cap HPIMoves to greener powertrains aren’t having a detrimental effect on diesel demand, as reduced supply of new registered cars three years ago is now feeding through into reduced supply that is broadly in line with any used buyer drop-off. Although that’s not a completely clear trend at this stage.

“Older diesel cars are under more price pressure than their more recent counterparts,” says Derren Martin (pictured right), head of UK valuations at automotive data expert Cap HPI. “Diesel cars that were produced prior to Euro6 are particularly struggling, it is impacting upon both demand and values.”

“Diesel demand is actually still reasonably OK”, adds NAMA’s Louise Wallis. “There are still people actively looking for a diesel-powered vehicle; if you do a higher mileage then a diesel is the car you should be buying.”

 

EMISSIONS DECISIONS

Stuart Pearson, BCA’s COO UK Remarketing shares his experience of demand or otherwise for Euro6 standard vehicles:

Stuart-Pearson - MD - BCA UK Remarketing

Stuart Pearson – MD – BCA UK Remarketing

 1. No nationwide pattern

Around the BCA network, we are not seeing any consistent evidence that Euro6 is currently a significant driver in price or demand across the board.  For a sale in Glasgow, Manchester or Measham, for example, the most important factors today remain age, mileage and condition and the market has not shifted dramatically away from Euro5 vans, for example.

 

2. Widespread demand means Euro5 vans still popular

Euro5 vehicles remain in demand across the UK and the market is robust due to the growth in demand for logistics, construction projects and a host of other factors.

 

3. The South East is the exception, for vans in particular

In the South East, it is becoming increasingly important to be clear on the engine variant for LCVs. The introduction of the ULEZ has focused some commercial vehicle buyers towards Euro6 models and this is likely to spread gradually across the country as the number of Clean Air Zones increase.

 

4. Newer vans mean naturally high prices

When looking at comparative values it is important to understand that Euro6 vans are newer and often lower-mileage, so will naturally attract higher prices.  More buyers will look to replace their current vans as volumes increase over time and values settle to a more manageable and affordable level for small business end users and sole traders.