Diesel/ Petrol/ Hybrid/ Electric/ EV/ Fuel Cell..? Which Fuel Should you Choose? Help & Advice for customers who are changing their lease car and fuel type…
One of the topics we discussed recently here @CarLease UK was the question of fuel-choice! This is a question we do get asked by customers – should I lease a petrol or diesel car?
Like many answers, it very much depends on your circumstances.
Take for instance a recent customers dilemma… a personal leasing customer covering low mileages. If you take a car personally, you clearly do not pay any company car tax; you just pay the VAT on the finance/maintenance rentals. The road tax is included for the duration of the contract too. As such, the fuel choice is not at first that relevant based on this analysis. However, as a low-mileage customer, covering 6,000 miles per annum this does add some thought.
Modern diesel vehicles use what is a called a diesel particulate filter (DPF), which is used to clear soot from the engine.
The DPF only operates when it reaches a certain temperature; such temperature being achieved only when a car travels a certain distance and at a certain speed.
For low-mileage users, particularly utilising stop/start journeys, you may have the issue of the DPF not becoming hot enough to clear excess soot. The ensuing problem is that the DPF becomes blocked and the car may fall into “limp mode”, meaning that the vehicle will not operate properly until it is cleared.
The only way you can clear a PDF is to drive it at the appropriate speed/length or time or, in the worst case scenario, arrange for a company to clear this or you. In the latter case this would have to be done at your own cost (it is not a warrantable item). As such, a low-mileage driver needs to carefully consider if a diesel vehicle would be appropriate for their driving behaviours.
In contrast, a company car user covering high-mileages would need to consider their fuel choice too. As a company car user you will pay company car tax. This is a calculation based on the P11d of the vehicle (the retail price including delivery and any additional options), your tax bracket (20/40% etc) and the CO2 of the vehicle.
It is the latter element which causes many company car drivers to consider their fuel choice carefully.
A modern diesel vehicle, notwithstanding the current political conjecture, is more efficient in terms of CO2 per km. While WLTP may change this, as we move into more realistic testing, the fact is that a diesel engine offers better CO2 plus better combined MPG. For the company offering the car, the rentals they can offset against corporation tax are also based on CO2 (as well as considering the fuel costings). If a high-mileage customer was to take a petrol engine, there is a risk of them paying more on company car tax (notwithstanding the diesel supplement) and the company having to pay more in fuel/reclaim less allowances against tax.
As you will see, choosing between petrol and diesel is not necessarily a straightforward answer.