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Company Cars - Petrol v Diesel

Company Cars - Petrol v Diesel

Last year diesel-powered cars recorded their best ever market share in Britain, topping 40%. In all 967,436 diesel cars were sold in 2007 and predictions for 2008 are for this share to rise even higher.

During the last decade there has been an inexorable rise in the popularity of diesels. Changes in technology have removed the seemingly inherent disadvantages when compared with petrol engines. These charges laid against diesel, that they are slower, noisier, more expensive and less clean than petrol have been almost dispelled. The focus is now on the positives.

Diesel engines have an improved torque against a petrol engine which gives good pulling power and less gear changing, making driving in everyday conditions a pleasant experience.

Then, there is the performance. A few years ago it was fair to say that a diesel offered poor performance compared with a petrol engine of a similar size. That's still true of what are referred to as normally-aspirated diesels - those without turbo-chargers. But virtually all new diesels cars today are turbo-charged which gives them particularly healthy performance in the mid-range. The result is that a modern turbo-diesel has the sort of get-up-and-go in fourth and fifth gear that knocks a petrol engine for six and is particularly useful for motorway driving.

The major improvements in engine technology have also worked the other way, removing a previous advantage held by diesel. A few years ago, there was also a commonly held belief that diesel engines run for much higher distances than petrol engines before giving any trouble, and so were popular with high mileage company car drivers. This popularity, together with the fact there were far fewer diesels around, pushed up the resale value of used high mileage diesel cars against the petrol equivalent. The reality is now today’s sophisticated engines, both petrol and diesel are equally reliable.

Now, we come to the final and most important point, fuel economy. With petrol and diesel prices now at record highs, this is an advantage that diesel cars possess over petrol ones which has been magnified over the last year and which has now given diesel the slight edge in many cases.

The rise of the diesel common rail system over the last few years has brought about a revolution in diesel engine technology with no heating up time, lower engine noise and lower emissions than older systems but its greatest legacy is its fuel economy which is improving with every refinement.

Here are a couple of examples comparing the costs of petrol and diesel models. We are using a fixed price contract hire model to ascertain running costs for the next three years and assume fuel prices to remain constant at today’s prices for comparison purposes.

The figures are based over 3 years on a fully maintained contract hire for 75000 miles in total with a petrol price of 104.3 pence per litre and a diesel price of 109.2 pence per litre. Benefit in Kind figures are based on a 20% taxpayer. All figures are based on calculations dated 9th May 2008.

Conclusion: You can make your own mind up about the figures but it does show, at the very least, you need to do these sums (or arrange for us to do them) before deciding whether to go petrol or diesel in individual cases. It is also important to note that the latest, newest engines, both petrol and diesel, have such stunning fuel economy figures compared to their predecessors.

Observations: The price difference between unleaded and diesel has risen to around 6.98 ppl. Overseas prices have also risen. The UK has the eleventh highest unleaded price in Europe and the second highest diesel price. With fuel prices high in the UK it is no wonder that on average fuel bills can be around 25% of a company's travel expenses.

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