Fleet News

Drive for diesel accelerates as company car drivers get wise to CO2 tax

COMPANY car drivers are heeding the Government's 'green' tax message and choosing low carbon dioxide emitting vehicles in preparation for the new CO2-based company car taxregime, new research suggests.

Lex Vehicle Leasing, the UK's second biggest leasing company, has seen the average carbon dioxide figure for its top 25 vehicles delivered fall from 192g/km to 180g/km over the last 12 months. But comparing the top five vehicles delivered shows an even more marked decrease, falling from an average of 200g/km in September 2000 to just 139g/km this year.

In September 2000, the most popular vehicle delivered by Lex Vehicle Leasing was the BMW 318i petrol saloon, which emits 190g/km and will incur a benefit charge of 20 per cent of its P11D price under the new tax system. The BMW was followed by the Lexus IS200, two petrol powered Volkswagen Passats and the Ford Focus 1.8-litre petrol model.

One year on, and the top five cars delivered by Lex Vehicle Leasing are all diesel models, starting with the Citroen C5 2.0 HDi which will incur a benefit charge of 18 per cent (including the 3 per cent penalty for diesel) until at least 2004 thanks to its CO2 emissions of 147g/km. And while two Passat TDIs still feature in the top 10 deliveries, there is no petrol powered Passat in the top 25.

Lex Vehicle Leasing says its order bank indicates that high mileage drivers are choosing to stay in traditional company car schemes rather than take a cash-for-car option.

Managing director Jon Walden said: 'Many high mileage drivers are choosing to retain their company cars while looking for tax efficient alternatives such as diesels.'

But he warned that while larger fleets were 'well informed' about environmental and company car tax issues, there was still work to do. 'The main worry is small fleets, where there is both widespread lack of knowledge of the key issues and very few environmental policies in place,' he said.

'Diesels can make an important contribution to environmental policy, particularly the new generation of low emission engines. Taxation policy reflects the benefits of these engines and the driver benefits from lower fuel bills and lower tax bills.'

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