Concern over diesel vehicles is now seen as more significant than Brexit for the decline in UK car buyer confidence, a survey by Paragon Motor Finance has shown.

The government has unveiled plans to eradicate diesel cars by 2040, with mayors in large urban cities across England demanding the plans be brought forward a decade to 2030. Every broker Paragon surveyed (100%) blamed uncertainty over what fuel type to buy as the reason for car buyers not replacing a vehicle, compared to 64% of brokers blaming concerns over Brexit.

Responses in the latest Headlight report come as latest SMMT figures for May 2018 showed diesel registrations for new cars were down by 23.6% compared to May 2017. This the fourteenth consecutive month in which diesel registrations have declined.

Julian Rance, director of Motor Finance at Paragon, said: “What we need as an industry is clarity. Diesel cars have been demonised but the infrastructure currently doesn’t support alternative fuel vehicles (AFVs).

“There needs to be…proper guidance from the Government on how it will work, what AFV rates will be going forward and a timetable of events because the uncertainty is causing confusion and negative demand.”

The last time confidence was reported to be this low by motor finance brokers in Paragon’s survey was in July 2016 – the month following Britain’s vote to leave the European Union.

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With the final report from the Financial Conduct Authority (FCA) into the motor finance market due in September, brokers surveyed said they were most interested in reading about commission arrangements (59%), affordability criteria (54%), transparency of information (49%) and asset valuation pricing risk (33%).

Other findings in the latest Headlight report reveal uncertainty over the impact of open banking on the motor industry, average deposits driven up for new cars to 13.5% compared to 8.4% a year ago, a slowdown in the new car market boosting used car sales and how the motor industry was in the driving seat for the GDPR changes in May.

EU-wide car sales reached a ten-year high last year, a factor attributed by industry experts to increased SUV sales offsetting declining sales in diesel vehicles.