Almost three quarters of motor finance brokers (72%) said uncertainty over diesel policy was impacting the market, in a survey by Paragon.

In recent months, diesel sales have fallen, as various bodies calling on measures to be put in place to combat older models. In some cases, the nuance between older diesel vehicles and newer, cleaner, models gets lost.

The Government plans to ban sales of new petrol and diesel vehicles in the UK by 2040 and has tasked local authorities with developing plans to reduce emissions in the most highly polluted areas by the end of 2018.

According to Paragon, brokers are divided on what action should be taken to ease any market disruption felt as a result. In particular, they offer only lukewarm support for a scrappage scheme – with 32% saying it may help compared with 44% who feel it definitely or probably would not – and shun zonal charging. More positively, more than half (56%) said that electric car infrastructure should be improved, with 48% stating there should be greater support for alternatively fuelled vehicles.

Regardless, the majority of brokers said the expect diesel sales to continue to fall. 46% of respondents said diesel sales would decrease moderately over the course of the year, while a further 21% expect a significant reduction. Brokers expect petrol vehicles to absorb some of this market capacity, with 25% of respondents expecting an increase in sales of petrol vehicles and 50% expecting the petrol market to remain steady.

The big winners from diesel’s decline however, are expected to be hybrid and electric vehicles. 67% of brokers expect a ‘few more’ electric sales over the coming 12 months, while 13% expect a significant increase. 38% expect moderate growth in the hybrid market and a further 38% expect significant growth.

Julian Rance, director of motor finance at Paragon, said: “In order to achieve a smooth transition towards alternatively fuelled vehicles, policy makers, manufacturers, infrastructure providers and lenders should work together to develop a more detailed timeline.

“Today’s Euro 6 diesel engines are in fact cleaner than many petrol vehicles so the blanket ban on fossil fuel vehicles by 2040 should be supported by interim targets to gradually phase out the most polluting models.

“Greater insight into new and developing engine technologies, together with clear plans to build out the supporting infrastructure for alternatively fuelled vehicles are also required.”