Collapsing diesel sales have dragged new car registrations deeper into the red, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT). The year to September has seen sales drop 7.5% overall, with diesel down 31.3%. A buoyant petrol market, rising 9.3%, and the rapidly growing demand for alternatively fuelled vehicles, up 21.7%, has somewhat helped offset the market-wide fall.

The comparison between September 2018 and September 2017, a traditionally positive month for the industry due to the plate change, makes for even starker viewing. The month has seen a 20.5% drop in new car registrations, with diesel falling 42.5% and petrol down 6.7%. Meanwhile, AFVs has seen a moderate growth of 3.9%.

For further information on new car registrations for September 2018 visit the SMMT website.

What is causing the drop in vehicle registrations?

A raft of changes to the market since the start of the year is being blamed for struggling sales, from confusion over diesel policy to VED changes and, recently, the transition to the new WLTP emissions standards.

Mike Hawes, SMMT chief executive, said: “With the industry given barely a year to reapprove the entire European model line-up, it’s no surprise that we’ve seen bottlenecks and a squeeze on supply. These are exceptional circumstances with similar declines seen in other major European markets.

“The good news is that, as backlogs ease, consumers and businesses can look forward to a raft of exciting high-tech cars and a market keen to recover lost momentum.”

What about the used car market?

September had positive news for the used car market, which has shown second-hand cars reaching a record average price of £12,853 – up 5% year-on-year, according to the Auto Trader Retail Price Index. The average price for used cars has been increasing twice as fast as new cars since the start of the decade, which has been attributed to new car finance deals.

There has been an increase in newer and, therefore, more valuable second-hand cars entering the market thanks to PCP agreements. At the end of their two or three year deals, owners are choosing to start again with another new car, while their previous car is sold second-hand.

The average price of a used car has risen from £8,997 in 2011 by 42% over the past seven years. This compares with the new car prices rising by 19% over the same period, from £21,911 to £26,105.

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