- Government to ban the sale of conventional petrol and diesel cars from 2040
- Hybrid models can still be sold after that date
- ‘Scrappage scheme’ to be consulted on in the autumn
What does 2040 ban on petrol and diesel cars mean?
This week's newspapers have been full of headlines about the cars we'll have to drive in the future, but how do the government's proposals affect car owners today?
The headline was that they will ban the sale of all new ‘conventional’ petrol and diesel cars and vans (excluding hybrids) by 2040. However, the report also included plenty of other measures, such as asking local councils to come up with plans to improve air quality in their areas and promising an extra £255 million to help them put those plans into action.
In addition to this report, there will be a comprehensive ‘Clean Air Strategy’ published by the Government next year, which will look at other sources of air pollution.
Mind you, it’s worth remembering that the motor industry and cars in general are already moving away from petrol and diesel engines. All the announcement does is to give a ‘deadline’ for the changes to take place.
Even now, you can go and buy hybrids, electric and even hydrogen-powered cars, and the car makers are investing heavily in these technologies. So, we can expect more and more such cars to be on sale in the near future, and in the future, the improving technology and increased availability should also address the main issues with such cars: their high prices and (in the case of electric cars) the limited distance they can go on a full charge.
However, it’s also worth noting that hybrid vehicles (which combine a conventional engine with an electric motor) can still be sold after 2040, so this ban won’t mean that we’ll have seen the last of petrol- or diesel-engined models in showrooms.
All the government has said is that it will consult on a scrappage scheme later this year, and we expect to hear more in the Autumn Statement. However, if such a scheme is given the go-ahead, we expect it to target the oldest and most polluting cars on the road; or, if there is a series of incentives, we would expect the biggest incentives will be given to the owners of the oldest, most polluting cars.
Also involved in the consultation will be retrofitting (fitting devices to existing vehicles to limit their emissions), subsidised car club memberships, and exemptions from any vehicle restrictions.
The government accepts that some councils may consider charging owners of the most polluting cars to drive in particular places or at certain times of the day. However, it says that the authorities should ‘exhaust other options before opting to impose charging’, and adds that all plans must be approved by the government before they are put into action.
The councils have eight months to produce their initial plans, and final plans must be produced by the end of 2018.
Also, despite the headlines, there is not much detail in the report. So, for example, although the government has said that part of the funding for these plans will come from ‘changes to the tax treatment for new diesel vehicles’, they won’t announce those changes until later in the year.
In the meantime, the current VED (road tax) system still incentivises low-CO2 cars, which means diesel cars can look very attractive.
And, if you’re looking at older cars, buying one can still make sense. They still return pretty decent fuel economy, while the low CO2 emissions continue to bring benefits in terms of road tax and, in some places, parking charges.
It’s also worth noting that, despite all the negative press about diesel cars over the last few months, prices are absolutely not plummeting. In fact, they’re rising, albeit not as fast as for the overall market.
Pricing data from Auto Trader’s marketplace has shown that, although average used car prices are up on last year – 9.1% higher in June 2017 compared to 2016 – the month-on-month increase for diesel used cars is slowing, and has been since November 2016.
Our expectation is that the cars most likely to be affected by increased levels of taxation will be the oldest models; and, as they are old, their values will be low anyway, so their value won’t drop significantly. That said, they could be the ones to benefit from a scrappage scheme, so it’s perhaps worth hanging on.
However, if you do want to sell your car, there’s no better place than Auto Trader, and you can put your car on sale in three easy steps. Simply click on this link to put your car on sale; and, if you just want to find out how much your car is worth, simply click on this link. Our valuations are updated all the time in line with the way the market is changing, so you can constantly keep an eye on how the value is changing.
In both cases, the big advantages are their lower running costs, both through better fuel economy (meaning lower fuel bills) and lower levels of taxation, thanks to their lower CO2 emissions. Electric cars also have the added attraction of their near-silent running and easy performance.
However, the big problem with today’s electric cars is the limited distance they can go on a full charge, Even the best can do no more than a couple of hundred miles, and most won’t manage even half that in everyday use – which won’t be enough for some people. There are also a limited number of public charging points, and charging an electric car takes much longer than it takes to fill the fuel tank on a more conventional car.
For most people, though, the big stumbling block will be how much these cars cost – noticeably more than the equivalent car with a conventional petrol or diesel engine.