IN GENERAL, a switch to diesel should result in significant fuel cost savings. Reductions in fuel consumption of between 20 and 30 per cent are commonplace, and often the economies are still greater. Citroen claims that, compared to an equivalently powered petrol-engined car, its new ZX turbo diesel would save a useful pounds 350 a year in fuel costs alone for a car covering 20,000 miles a year.

Similar claims can be made for other manufacturers' models: the Rover Montego is 45 per cent more economical than its petrol- engined equivalent; the Audi 100 turbo diesel is over 50 per cent more economical than the petrol model; and the Peugeot 605 turbo diesel is up to 60 per cent more fuel-efficient than its petrol-engined stablemate.

Though in the past diesels might have been rejected by many as slow, smelly and noisy, the latest diesel models coming on to the market can virtually match both the performance and the refinement of equivalent petrol-engined cars, and yet on top of the undoubted fuel economy, they also gain in terms of higher second- hand values, greater durability and greater reliability.

This does not mean, however, that the diesel is the answer to all of modern society's transport problems. For a start, the differential between diesel and unleaded prices in Britain is far smaller than in many Continental markets. In the UK the differential is currently less than lp per litre, while in France it is over 16p and in Germany nearly 12p.

Second, the UK has traditionally been a very small market for diesel cars. In 1980 under 6,000 diesel cars were sold here, but in 1990 it has risen to 123,000 and last year it was up again to just under 140,000. It is entirely possible that UK diesel sales in 1992 will top the 200,000 mark, so great has been the demand in the first half of the year. Because only a relatively few diesel cars were coming on to the second-hand market, second-

hand values have remained traditionally high; high enough to make up for the fact that in the past diesel-engined cars tended to cost more to buy in the first place.

But now significantly higher numbers of used diesels are on the market, the likelihood is that residual values will start falling as a simple factor of supply and demand and it may be that in time the residual advantage enjoyed by diesels will be wiped out by their very popularity. Leslie Allen, director of Glass's Guide, the motor trade's 'bible' of used vehicle values, says: 'Those who say that diesel residual values are going to drop considerably I think are too pessimistic. There is growth in the number of used diesels coming on to the market and there has been some movement down in prices, but they are not major moves. Over the next two years I expect the diesel market to continue to expand, though much depends on the differential between diesel and petrol prices.'

For the moment, diesels continue to look a good buy. Taking into account factors such as list price, residual values, fuel costs and fuel consumption and maintenance costs Hertz Leasing recently produced whole-life cost figures for different cars over three years or 36,000 miles. Taking three examples, what they found was that a Peugeot 405 1.9GLD cost pounds 2,186 less to run than the petrol-engined 405 1.6GL; a Peugeot 605 SRdt cost pounds l,397 less than the 605 SRi; and the Rover 218 SLD cost pounds 906 less than the 216 SLi.

(Photographs omitted)

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