Navigating the ULEZ Car Market – Should You Change Car Now or Wait?
London’s ULEZ (Ultra Low Emission Zone) has now expanded to cover the entire capital, all 600 square miles of it, turning the city into the largest low emission zone in the world. This means that if you have a non-compliant car, one that doesn’t meet the stricter emissions standards (Euro 4 for petrol and Euro 6 for diesel), you will have to pay a daily charge of £12.50 to drive it.
The obvious solution would appear to be to upgrade your vehicle to one that is ULEZ-compliant, so that you don’t fall foul of the restrictions and are able to drive without having to pay the charge.
However, be warned, changing your non-ULEZ car for one that is, might be the costliest mistake you make this year.
Is it possible to by a ULEZ car for under £2000?
There is of course a scrappage scheme offered to Londoners: up to £2000 offered for your old vehicle, as long as it has valid and current insurance, MOT and road tax (VED).
Use valuation services, or check against similar models in the classifieds to see if your car is worth £2000 or less. In which case this may well be a viable route, but keep in mind you get ‘up to £2000’, so it could prove a bit of a gamble.
However, if your car is worth more than that, you should sell it privately, to a dealer or trade it in. Don’t be surprised if you’re offered less than you were expecting. Non-ULEZ compliant cars are currently plummeting in value, particularly in London and its surrounding counties.
Similarly, ULEZ-compliant cars are higher priced than normal and again, that goes especially for the South East region. Be prepared to travel for the best bargains.
There has been much discussion about whether it’s actually possible to buy a ULEZ-compliant car for £2000 or less. It is. Auto Trader hosts compliant models starting at less than £1500 but they maybe older and smaller compared to your current car.
The ULEZ Numbers
In fact, 1520 compliant cars sit under the £2000 threshold within a 50-mile radius of central London. Stretch your budget to £5000 and there are more than 10,000 compliant options. If you’re willing to spend over £5k there are over 65,500 compliant cars available.
If you’re willing to look further afield, across the country Auto Trader offers over 4000 cars at under £2k, 27,000 under £5k and claims that 88.9% of the national used car stock is ULEZ-compliant.
A budget champion is the 2008 Ford Ka (petrol) priced at a wallet-friendly £1386. Other examples include the 2004 Fiesta for £1481, 2007 Fiat Grande Punto for £1829 and 2008 Peugeot 207 for £1953 among others (all petrol of course).
The Hidden Costs of ULEZ
Before you leap into the decision to buy or sell due to ULEZ, consider a more cautious approach. The reality is that the current fluctuating state of the market could lead to financial losses. The cost of changing your car, due to the inflated price of your next used vehicle, could result in significant monetary setbacks that won't be recouped.
For example, keep in mind that if you use your car to commute five days a week, you’d end up paying a total of £3250 in daily ULEZ charges. If you have to pay £12.50 every single day of a year, your annual total would be over £4560.
But get your calculator out and start working out the actual cost of changing your car. By this we mean how much money you’ll lose on the sale of you current non-ULEZ car, and how much extra you’ll pay for a ULEZ car. In some cases, this could extend to as much as £5000.
Again, according to data from Auto Trader, the ULEZ premium of just buying a ULEZ compliant car could be more than £3000. Research examined the cut-off year for diesel models; while most 2015 cars will not be compliant, from 2016 they are all Euro 6 standard.
It turns out that a Volkswagen Golf from 2016 is a whopping £3600 more than the equivalent 2015 model, that's 28% increase from about £9500 to £13,000. Similarly, a 2016 Ford Focus is 27% more going from £7500 to nearly £10,500, while a Nissan Qashqai jumps by 16%.
Patience Could Bear Fruit
Experts predict that within a year, prices are likely to normalise. Waiting it out means avoiding inflated prices and making a more financially sensible choice in the long run.
Moreover, a game-changing factor could come into play on 2nd May next year – the Mayoral Election, where opposition candidates advocate for a rollback of the new ULEZ expansion – so you might not need to change car after all!
Paying an additional £12.50 a day will be a tough and a financially detrimental pill to swallow for many non-ULEZ car drivers. However, swapping into a ULEZ car could leave you with a less suitable and desirable vehicle, and further financial penalty.
Work out how much you really need to use your car and you may find that the smart money could be on keeping a hold of your current pride and joy. At least for now.
