Fleet News

Taking the green option is no guarantee to saving costs

‘Green’ cars have become a powerful marketing tool.

Most fleet operators will not only be aware of the environmental benefits of choosing more fuel efficient vehicles, but also the evidence that it’s an oppor-tunity to reduce costs.

During the last few years manufacturers have been introducing clever ‘eco’ branding and promoting their special low-CO2 variants.

However, for many models, unless fleet operators carry out thorough research, these low-emission versions might not result in the cost savings expected.

For eight years the UK has had a company car tax system that favoured low-CO2 emitting cars, while for retail customers across Europe there has been a growing appetite to choose a vehicle with lower emissions.

Many car manufacturers have seen an opportunity to gain a competitive advantage by offering technology that reduces fuel consumption and cuts CO2 emissions, and there are a number of different ways the technology has been presented to buyers.

BMW was one of the first carmakers to offer what it calls EfficientDynamics technology across a large proportion of its vehicles, while Audi and Mercedes-Benz were close behind.

Other manufacturers have gone down the route of having low-CO2 derivatives alongside standard versions, such as Ford’s Econetic, Volkswagen’s Bluemotion and
Vauxhall’s Ecoflex.

Often, there is a premium to be paid for the extra technology involved in producing these low CO2 versions.

The benefit to fleets and company car drivers of this technology would be greater than to retail customers.

If a car has CO2 emissions at 120g/km or less it would currently fall into the lowest BIK tax band for that fuel type, so the difference between two cars – one at 120g/km and the other at 125g/km – would be of greater significance to a company car driver.

After they are defleeted, a dealer would have a more difficult job persuad-ing a retail customer the lower CO2 car would be worth a great deal more than the higher CO2 car.

There might be a small advantage in the resale value of the ‘greener’ version, but according to CAP Monitor, this could vary from no premium at all, to a couple of hundred pounds.

What is more startling is that when the fuel consumption advantage of the more efficient variant is small and the price premium is large, fleet operators might never break even on the higher cost.

This can be difficult to illustrate as some manufacturers only offer the ‘eco’ model on an equipment grade that isn’t available elsewhere in the range.

For example, the Kia Ceed Eco-Dynamics diesel is not offered in the same power output as standard models in the same trim level.

Therefore it is difficult to compare like-for-like on list price as the same spec engine without the ‘green’ technology is offered in a lower equipment grade.

Likewise Volkswagen’s Bluemotion models are an equipment grade in their own right as are Ford’s Econetic derivatives.

It is probably fair to say that they would be close to a mid-range equipment grade if it were not for their smaller wheels and a few minor differences in specification.

Meanwhile Vauxhall and Volvo offer their most efficient Ecoflex and DRIVe models across several equipment levels, making comparison much more transparent.

We took a sample of several popular low-CO2 models and compared them with a standard version.

Where there is parity or near parity on price, the ‘greener’ version will
start saving money straight away.

In other cases, where there was a premium, we also took account of any benefit in residual value, working out the amount of cash required to recoup based on a pence-per-mile fuel cost advantage.

For example, according to the official figures, the Skoda Octavia Greenline hatchback delivered only a small fuel consumption advantage over the standard Octavia 1.6 TDI – equivalent to 0.18 pence per mile.

Despite the payback on the higher residual value at three years/60,000 miles, the Greenline would not break even on its price premium until more than a quarter of a million miles are covered – farther than the distance to the moon.

We also found that while selecting a Focus Econetic with stop-start began to deliver cost benefits when covering only a modest annual mileage over an Econetic version without that system, achieving a saving over a standard diesel Focus was far more difficult.

To be fair to the manufacturers, it is rare for this technology to be promoted purely as a way to reduce costs, and in most cases, as long as the vehicle covers 12,000-plus business miles a year, or it is kept on a longer four-year-plus contract, there should be a comfortable saving compared with the standard version.

There is also the age-old debate about how representative a fuel consumption figure based on a brief test using a single vehicle on a rolling road can be when there will be many thousands of those cars on the roads driving in varying conditions.

However, the figures are useful for benchmarking, and regardless of whether a vehicle can attain anywhere near the official combined cycle reading in real-world driving, there should be a similar relative advantage for the one with better fuel consumption.

But if drivers are covering less than 12,000 miles a year, it is likely that the specialist low-CO2 version of the car may not be the best solution to minimise running costs.

Going green: how Ford turns a Focus TDCi into an Econetic

The Focus Econetic is available with optional auto stop-start, which automatically shuts down the engine when the vehicle is at idle – at traffic lights, for example – and restarts the engine when the driver wants to move off, saving the fuel wasted at idle.

A Smart Regenerative Charging system increases the alternator output when the vehicle brakes or decelerates. This converts the kinetic energy of the vehicle into electric energy without having to use additional fuel. The ‘free’ electric current is used to recharge the battery, so that it can be used by the electrical systems at a later stage.

Low-tension FEAD: A new alternator bracket and new belt pulley design enable the tension of the front end accessory drive (FEAD) belt to be lowered without causing issues normally related to drive belt slackness such as increased wear of the belt itself or the alternator bearings, as well as raised noise levels. With the belt at a lower tension, friction in the entire system is reduced and less friction leads to reduced fuel consumption.

Econetic gearbox: The gear ratios of the Ford Durashift five-speed manual gearbox have been revised, offering a longer ratio for third, fourth and fifth gears – bringing down engine revs and engine noise.

Modified aerodynamics: To improve aerodynamics, the Focus ECOnetic is lowered by 10mm at the front and 8mm at the rear, while the outer areas of the lower grille are fitted with blanking plates on the inside surface which contribute to the vehicle’s favourable coefficient of drag of 0.31.

Specialist tyres: The latest generation Michelin Energy Saver 195/65R15 tyres lower rolling resistance and help save fuel. The standard 1.6 TDCi Style has 16-inch wheels and does not use low rolling resistance tyres.

For all the latest advice and information on fleet management, have a read of our fleet operations section.

Leave a comment for your chance to win £20 of John Lewis vouchers.

Every issue of Fleet News the editor picks his favourite comment from the past two weeks – get involved for your chance to appear in print and win!

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee