Fleet News

Alternative-fuel vehicles forcing 'stab in dark' budget forecasting

CONTRACT hire and leasing companies are forecasting very different maintenance budgets and residual values for alternatively fuelled vehicles. The paucity of historic data on both the running costs of gas-powered vehicles and demand for them on the second-hand market is forcing the industry to take a stab into the dark with its forecasts.

Investment and commitment by the major fleet manufacturers suggests the market is ripe for development, and further financial impetus for gas use is anticipated in the Budget with the Government committed to increase duty on petrol and diesel by 6% above the rate of inflation.

Certain companies agree that the growing differential between the price of LPG and traditional fuels, allied to greater availability of LPG as the refuelling network grows, could actually lead to a premium on the used market. But others suspect that bi-fuel vehicles will be worth no more than their petrol equivalents at defleeting, and some fear public suspicion over driving on gas will lead to a shortfall in residual values compared to petrol models.

ACL has taken one of the most positive views on the residual value of dual-fuel vehicles, estimating a premium of around 10% over petrol models so long as supply remains limited. Public sector contract hire specialist Automotive Leasing, forecasts a shortfall in residual values of between 5% and 10% compared to petrol models. Ford Credit is making little or no extra provision for the SMR for gas-powered vehicles, saying the only anticipated change in budgets was a change of gas filter at 50,000 miles.

Vauxhall Master Hire has taken a close look at the Dutch market where LPG is common to gauge which parts are likely to require replacement, and to estimate the approximate cost of out-of-warranty claims. As a result it is applying an additional 15% to its SMR budgets to cover the costs.

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