Volkswagen and Audi dealers are being warned the brands could face a “major credibility crisis” in the UK following revelations the Volkswagen Group deliberately "fixed" emissions software fitted to some of its vehicles in the US, says Glass's.
Residual values could also fall.
The scandal means that models including the Audi A3, Volkswagen Jetta, Beetle, Golf and Passat were all fitted with software that was deliberately designed to cheat US emissions tests. South Korean officials say they are going to look into three diesel models, the VW Jetta and Golf and Audi A3.
Rupert Pontin,Glass's head of valuations, said: "Our understanding is that VW have admitted that the accusations made against them are true, although we don't yet know whether similar ‘fixes' affect UK models.
"Whatever the final truth, this is potentially very damaging for the Audi and Volkswagen brands.
"Essentially, the company has deliberately set out to mislead legislators and customers.
"If you are a fleet or private motorist who has chosen a VW or Audi, with the emissions performance of that vehicle being a major benefit, then you are going to feel cheated. No question.
"Exactly how this plays out is very difficult to predict but it could affect the used values of Audis and VWs. These are brands built on decades of credibility and that credibility has been badly damaged."
Rupert added that it did not help that Volkswagens and Audis had, in the view of Glass's, started to reach a saturation point in the UK market in recent years.
"Our view has been for a while that Volkswagen sells too many cars for a semi-prestige brand and Audi too many for a prestige one.
“The volumes are large enough that they are creating downward pressure on RVs.
"The emissions scandal is obviously not going to help this situation. If buyers lose trust in the brands, then there is inevitably less demand and values suffer."
It has been suggested other brands in other countries could also be implicated in the emissions' rigging scandal.
The Guardian today quotes a US official.
“We need to ask the question, is this happening in other countries and is this happening at other manufacturers?
“Some part of our reaction is not even understanding what has happened exactly,” said John German, one of the two co-leads on the US team of the International Council for Clean Transportation (ICCT), the European-based NGO that raised the alarm.
Regulations affecting diesel cars in the US are much stricter in the US and they represent just 3% of the new car market.
However, half of all new cars sold in the UK are diesel, with the company car market favouring the fuel.