Fleets need a balanced view on vehicle choice

Vehicle selection has to be more carefully evaluated than ever before, but diesel still has an important role to play although its importance will diminish over time. That’s why we are advising our clients to adopt a balanced fleet view that embraces a combination of diesel, petrol and alternative powertrains.

Petrol definitely has an increasing role to play in the fleet mix, thanks to the improved fuel economy of the latest generation of petrol models, says the fleet management and leasing specialist. But in many instances, especially for high mileage fleets, diesel is still the answer.

Managing Director, Martin Brown, said: “The improving fuel economy of petrol models and their cheaper list price really can help to make them as financially viable to run as a diesel.

“But not in every case. Diesel still has an important role to play, but its importance will diminish. What that timeframe will be is difficult to ascertain. But for now, don’t discount diesel when it’s still the most appropriate choice for your fleet.”

Brown said that diesel has been the fuel of choice for the majority of fleet operators for a decade or more for a variety of reasons, including its fuel and cost efficiency and the tax advantages it offered for drivers.

“But diesel has been up against the ropes recently, taking a series of seriously damaging blows. The fuel has been highlighted as the cause of health damage, notably respiratory disease.

“Then there has followed the £10 per day Toxicity Charge for older diesel cars entering the central London congestion charge zone, which will be introduced this October. And the government’s new Clean Air Strategy document last month stopped short of a diesel scrappage plan but looks set to ban petrol and diesel cars by 2040 – less than 23 years away.”

To help underline the need for a balanced view of fleet mix, Fleet Alliance looked at the cost performance of a basket of cars. This threw up some interesting results, particularly over 10,000 miles per year running cycles.

The company looked at three Ford Focus models: the petrol-driven 1.5 ST-Line Nav EcoBoost, list price £21,590; the diesel 1.5 TDCi ST-Line Nav, list price £21,790; and the Focus Electric, list price £31,625.

Ford Focus Model 1.5 ST-Line Nav EcoBoost 1.5 TDCi ST-Line Nav Focus Electric
Drivetrain Petrol Diesel Electric
List price £21,590 £21,790 £31,625
WLC – 3 years/30,000 miles £12,576 £12,167 £15,949
WLC – 3 years/60,000 miles £15,350 £14,468 £17,864

*Lowest price/cost highlighted

Over three years/30,000 miles, the diesel model had the lowest whole life costs of the three models at £12,167; followed not far behind by the petrol model at £12,576; and the electric model at £15,949.

When the operating cycle was extended to three years/60,000 miles, however, the Ford Focus diesel was even further ahead on running costs with a clear margin over the petrol and electric models. The diesel cost £14,468 to operate over three years/60,000 miles compared with the petrol version at £15,350 and the electric model at £17,864.

Moving to the top end of the choice list, the company looked at the Volvo XC90, with three different drive-trains – petrol, diesel, and plug-in hybrid – where the diesel again came out on top in the whole life costs battle.

Fleet Alliance compared the petrol-powered XC90 2.0 T6 R-Design, list price £54,700, with the diesel 2.0 D5 R-Design, list price, £51,600 and the Hybrid 2.0 T8 R-Design Twin Engine with a list price of £64,300.

Volvo XC90 Model 2.0 T6 R-Design 2.0 D5 R-Design Hybrid 2.0 T8 R-Design
Drivetrain Petrol Diesel Plug-in hybrid
List price £54,700 £51,600 £64,300
WLC – 3 years/30,000 miles £31,107 £25,184 £31,167
WLC – 3 years/60,000 miles £36,854 £30,384 £36,003

*Lowest price/cost highlighted

Over three years/30,000 miles, the diesel model had the lowest whole life costs of £25,184, followed by the petrol model at £31,107 and the hybrid at £31,167.

Over three years/60,000 miles, the diesel was still the most cost competitive with whole life costs of £30,384, but the hybrid was now next in line with whole life costs of £36,003, followed by the petrol model at £36,854.

Martin Brown added: “It’s important not to become too blinkered in the prevailing emotional anti-diesel mindscape. For fleets, a balanced view is what is required.

“Diesel still has an important place in any fleet but it’s critical to evaluate all cars to see where diesel is still relevant – or where a petrol or alternative fuel vehicle might fit in.”