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By Christopher Crow, chief editor, CAP Many of us will recall the introduction by Ford of their first mainstream diesel-powered car into the UK market in the form of the Ford Sierra 2.3D. At launch it sported less than 70bhp which when compared to today's equivalent, the Mondeo 2.2 TDCi with 197bhp, seems positively pedestrian. The mainstream popularity of diesels languished for many years until the introduction of taxation changes in the UK which incentivised company car drivers to select diesel power over petrol in order to reduce the tax burden and minimise fuel spend. But what about private buyers? Does diesel make sense for them? And with the recent price movements in the relative cost of a gallon of petrol versus diesel, does this change the maths?Private buyers, in the main, focus on the upfront cost of buying a vehicle, but are increasingly focusing on the associated running costs such as insurance and fuel. It has now become a popular mantra that diesel offers higher mpg, but do consumers take into account the difference between the cost of a gallon of petrol compared to the cost of a gallon of diesel? And if they do, are they now considering the growing price advantage of petrol over diesel in many cases? This is an important issue because it changes the 'sell' Does it still make sense to Pump price differences between diesel and petrol are changing thinkingUsed car analysisFor daily automotive news visit www.am-online.com/newsfor the dealer faced with customers whose knowledge has not moved with the times and it also potentially impacts on the relative used values for petrol and diesel cars, if demand patterns are changing.The graph (below left) tracks the pump prices of petrol and diesel over the last two years. In January 2010, the cost of diesel was £1.14 a litre compared to petrol at £1.12 a litre. By January 2012 the cost of diesel had risen to £1.42 a litre compared to petrol at £1.34 a litre. That's an increase in the diesel premium from 2p a litre in 2010 to 8p a litre now. Common sense might suggest that this widening of the gap between petrol and diesel at the pumps would adversely affect the trade price of diesel powered cars relative to petrol. CAP's Used Car Price index tracks the depreciation of used vehicles over time. The index highlights how petrol models have depreciated over the last two years compared to their diesel equivalents. Diesel cars have on the whole depreciated less than their petrol-engine equivalents over the last two years. But does this mean that the old diesel premium is alive and well?We have to drill down to sector level to identify what is really happening and when we look at the city cars sector the pattern is indeed changing. Here diesel cars are not outshining their petrol counterparts, which suggests that the used car buyer has indeed become aware of the advantage of petrol when it comes to the small car. To demonstrate the validity of this view of petrol versus diesel we can look at the running cost comparison of the Fiat 500.The petrol-powered 0.9 TwinAir cost £1,000 less than the diesel equivalent when new in March 2010 and although worth £525 less today as a two-year-old vehicle, that equates to a savings on depreciation of £475. And given the MPG performance of the petrol model and the cost of a gallon, the petrol model also saves the owner money.!1.501.45DieselPetrol1.401.351.301.251.201.151.10Cost per litre (£)Jan 10Feb 10Mar 10Apr 10May 10Jun 10Jul 10Aug 10Sep 10Oct 10Nov 10Dec 10Jan 11Feb 11Mar 11Apr 11May 11Jun 11Jul 11Aug 11Sep 11Oct 11Nov 11Dec 11Jan 12Fuel pump prices

New car marketNewsDealer profileNew car newsUsed car RecruitmentanalysisNewsdigestShowroomto choose diesel for retail?Petrol engine technological advances have resulted in significant improvements in fuel consumption, across other sectors too. Take the latest generation Ford Focus. The new 1.6 TDCi diesel engine has bene-fited from an improvement of around 7% in fuel consumption over the previous model. However, more striking has been the leap in petrol technology with the introduction of the all new 1.0 EcoBoost over the outgoing 1.6 petrol engine which has resulted in a staggering 39% improvement in fuel consumption.Similar to the Fiat 500, when you examine the forecast depreciation at 24 months/30,000 miles, it's the petrol engine 1.0 EcoBoost model which outperforms the diesel. And perhaps intriguingly for fleet operators, the picture is just the same at 36 months/60,000 miles. And for the company car driver looking to reduce their tax burden, the petrol model also stacks up for them.With an increasing number of OEMs planning to launch ultra-efficient petrol engines in order to meet increasingly stringent EU emission targets and the technological difficulties of reducing diesel particulates further without costly technology, the tide seems to be turning in favour of petrol once more. The growing gap between petrol and diesel at the pump can only serve to encourage this change in the long term.'The tide seems to be turning in favour of petrol once more'????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????