Fleet News

Low-mileage diesels can cost fleets dear

FLEETS blindly following the diesel route while ignoring petrol could be costing themselves and their employees thousands of pounds a year.

Often fleets are running diesel cars oblivious to the fact that it is causing higher fuel bills and more tax for the drivers.

According to Vauxhall’s fleet brand manager Paul Adler, fleets should look at the mileages their cars are doing and work out which fuel option will serve them best. In many cases, for cars that are going to do less than 10,000 miles a year, petrol is the more economic choice.

Adler said: ‘While it is true that running a diesel-powered company car for 60,000 or 90,000 miles over three years remains the more cost-effective option, for mileages of less than that the picture is far less clear-cut.’

Part of the reason is the widening differential between the price of diesel and unleaded petrol at the pumps.

The AA’s tracking of fuel prices shows that the average price of diesel in the UK in May was 88.3p per litre (£4.01 per gallon) while that of unleaded petrol was 84.3p (£3.83), a differential of 4.5%.

A year ago, diesel was 82.8p per litre (£3.76 per gallon) while unleaded petrol was 81.8p (£3.72), a differential of just 1.2%.

As a result, when the front-end premium of diesel – often as much as £1,000 – is included alongside the extra cost of the fuel, many drivers are just not doing enough miles to claw back the extra costs through the lower fuel consumption of diesel cars.

Adler added: ‘The figures clearly show fleet managers need to make a balanced decision on the perfect mix of cars on their fleet to optimise wholelife cost benefits, and that diesel, while undoubtedly having major advantages for high mileage drivers, is not the panacea for all fleet operating issues.’

And too many drivers are also falling into the trap of assuming that choosing diesel will lower their tax bills.

Adler said: ‘From a benefit-in-kind taxation view, the loss of tax advantages that Euro IV diesels currently enjoy from next January and the continuing cleaner and lower carbon dioxide emissions that petrol cars are now capable of producing, means that diesel is no longer automatically the most tax-advantageous.’ Many smaller-engined petrol cars are now lower in tax than their diesel counterparts.

Petrol beats diesel: running costs

MODEL – 5DR HATCH MILEAGE WHOLELIFE COST (£) SAVINGS (£)
VAUXHALL ASTRA CLUB1.6I 16V 36MONTHS/30,000 13,397.04 346.99
VAUXHALL ASTRA CLUB 1.7CDTI 16V 100PS 36MONTHS/30,000 13,744.03 ---

Figures from TopCalc (three years/30,000 miles)

Petrol beats diesel: BIK tax

MODEL 5DR H/BACK P11D VALUE CO2 SCALE CHARGE TAX PAYABLE NOW @ 22% TAX PAYABLE POST JAN 06
VAUXHALL ASTRA CLUB1.6I 16V £13,632 158 18% £540 £540
VAUXHALL ASTRA CLUB 1.7CDTI 100P £15,042 135 15%* £496 £596

* Rising to 18% for cars bought post Jan 06

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