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Price premiums for diesels growing in premium sector

The premiums being paid for used diesel-powered prestige-badge cars over petrol-engined equivalents are actually still on the increase, according to Glass’s.

Comparing key petrol and diesel models of a similar specification, engine capacity and list price when new, Glass's found the premiums being paid for most three-year-old used prestige-badged diesel cars today are significantly higher than at the same point last year.

For example, the trade value of a three-year-old BMW 320d SE (diesel) in November last year (2000 X-plate) was £1,375 higher than that of a 318 SE(petrol) of the same age.

However, 12-months on and the same specification cars of the same age (2001 '51-plate) sees an increase in the premium for the diesel variant to £1,500. The trend is even more apparent with another leading car from the compact executive class, the Audi A4. In November 2003 the trade value of a three-year-old Audi A4 1.9TDI SE (diesel) was £550 higher than that of the equivalent petrol model, the A4 1.8T SE, but by this month the premium has increased markedly, to £1,650.

Looking at the large prestige-brand saloon sector, the growing premium for diesel cars is again evident.

For example, the value of a three-year-old BMW 530d SE auto (diesel) was £475 higher than for a 530 SE auto (petrol) last November, but 12-months later and that price premium jumps to £1,500. This same pattern can be found with another key seller in this sector, the Mercedes E-Class.

Last November a three-year-old Mercedes E220 CDI Avantgarde auto (diesel) had a trade value £1,850 higher than the comparable petrol variant, the E240 Avantgarde auto (petrol). However, by this November the premium for the diesel has grown to £2,350.

"The increase in like-for-like residual value performance indicates that diesel demand has exceeded the increase in supply," says Richard Crosthwaite, prestige car editor at Glass's. "This is a clear sign that large numbers of used car buyers are switching to the enhanced driving characteristics and fuel efficiency of the latest-generation diesel cars. The diesel premiums are likely to remain at similar levels as we progress through 2005."

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