Fleet News

Diesel loses edge as car prices rise

PRICE premiums for diesel cars are increasing, a new report has found, meaning savings over petrol models are taking much longer to show themselves.

The list price for diesel powered vehicles has increased at almost double the rate of petrol cars over the past five years.

The report indicates the list price of the typical petrol vehicle has risen by £351 since September 2000, compared to £677 for the average diesel. Consequently a diesel car must be run for longer before it proves economical.

In the popular lower-medium sector – cars such as the Ford Focus or Vauxhall Astra – the premium for a diesel-powered model over a petrol version with identical specification has now reached an average of £1,100, according to EurotaxGlass’s New Car Market Trends report.

After three years and 30,000 miles a petrol lower-medium car would still be cheaper to own, even when taking into account the higher residual value of the diesel.

Not until the average annual mileage exceeds 20,000 would the economic benefits of the diesel begin to pay off.

Alan Cole, editorial consultant for the Glass’s Market Intelligence Service, said: ‘For upper-medium cars such as the Vauxhall Vectra and Ford Mondeo, the picture is slightly better as there is a very small saving in pence-per-mile running costs.

‘However, even at 20,000 miles per year the difference is only 1.4 pence per mile in favour of the diesel. Nick Phillips, sales director for fleet management firm Provecta Car Plan, said he had also noted the growing rise in premiums.

He said drivers needed to do their sums before making a decision on a new company car, adding: ‘People should just consider their total mileage and their fuel reimbursement rate and carefully consider what’s best for them. ‘Don’t rush into saying, ‘I’m going to have a diesel because it’s more fuel efficient’ because it may not be enough to offset the cost per month. It’s not black and white.’

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    Diesel pay day a long way off

    TAKING the list price and official fuel economy figures as the base, this case study shows just how many miles drivers have to cover to make break-even on diesel.

    Taking a random example of the Ford Focus 1.6 diesel and petrol LX models, the diesel has to cover40,000 miles before it has clawed back the extra purchase costs in fuel savings.

    Petrol Diesel
    Model 1.6 LX Petrol 1.6 LX TDCi diesel
    Price £13,157 £14,567
    CAP RV (3yrs/60k) £4,625 £5,025
    TOTAL COST DIFFERENCE - £1,010
    Comb mpg 42.2 58.9
    Fuel ppm 9.9 7.4
    FUEL SAVING - 2.5 PPM
    DIESEL BREAK-EVEN MILEAGE - 40,000 (£1,010÷2.5)

  • Figures based on diesel at £4.35 and petrol at £4.18 per gallon
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