Diesel still the real deal for fleets, counters Masterlease
Don’t be put off by diesel’s current higher price differential with petrol – it’s still a better fleet deal and looks set to get better, says Masterlease.
The so-called ‘dash for diesel’ may have slowed to a dawdle because of the widening differential with petrol at the pumps, but it still remains a better deal for the company fleet, advises Masterlease.
The leading fleet management company is warning businesses against a ‘knee-jerk’ reaction against diesels because of the average 13 pence per litre price gap, but to take a holistic view of their fleet car strategy.
Although there is also a higher leasing cost for a diesel over three years/60,000 miles, there remains lower benefit-in-kind tax on diesels for employees as well as smaller corporate National Insurance contributions because of the lower CO2 emissions and greater MPG.
Volume manufacturers, including Renault and PSA, are introducing smaller-engined, but more powerful 1.5 litre diesels that will attract lower CO2-based VED banding and are cheaper again to run.
“These engines will now be big enough for most business-related mileage and cheaper to run. An extra incentive to the drivers will be that they could have higher spec finishes so they get more bang for their buck,” says sales and marketing director, Clive Forsythe.
“There are a lot of other less mainstream fleet models that are delivering strong diesel contenders into the market, all of which are worth considering because this could provide decision makers with some favourable terms. This is why fleet managers wanting to make savings need to take a holistic view of the whole life cost of the vehicle and smaller diesels could provide a win-win for businesses and drivers as they drop into a lower VED banding.“
According to the AA, the average price of a gallon of diesel is £6.05 (133.1p a litre) with a gallon of unleaded petrol costing £5.43 (119.5p a litre). A year ago, the price of a gallon of diesel was £4.43 (97.4p a litre) with a gallon of unleaded petrol costing £4.41 (97p a litre).
Then, the cost of fuel for a Ford Focus 1.8 Style 5dr (40.3 mpg on the combined fuel cycle) travelling 12,000 miles a year, would have been £1,313.15. The cost of fuel for a Focus 1.8 TDCI Style 5dr (54.2 mpg) travelling the same distance would have been £980.81 – a saving of £332.34. Today that saving has reduced to £277.20 as the cost of fuel has risen to £1,616.40 (petrol Focus) and £1,339.20 (diesel Focus).
“Although fuel looks set to go up at the forecourts, fleet managers must watch the differential price rather than just that at the pump. Despite more efficient petrol engines, diesels have got greater scope for fleet cost savings,” concludes Forsythe.
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