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The question of whether to go petrol or diesel is nearly as old as the car itself. It’s an important decision and something that requires a bit of research because there are more factors in play here than you might think.
In this article we take you through the issues involved, and round up with a case study to show you the factors you should be taking into account when considering your next new company car.
Which sounds better – petrol, diesel, or hybrid? Watch our video below and listen!
Fuel economy
Historically, diesel cars have been more efficient than petrol ones. They simply burn fuel in a more efficient manner, which means less used per mile.
That said, with the introduction of higher-tech turbocharging systems the petrol world is catching up.
In general, you’ll find petrol more efficient than diesel over a medium-to-long term of ownership if you predominantly do shorter trips. If you travel more on the motorway for longer distances, diesel is the way forward.
At the pumps you’ll find diesel is also more expensive than petrol (although this has been rather erratic over recent months and not the case for today’s averages), which reduces the gulf between the two and again means crunching some numbers.
Taxation
Related to fuel economy is the CO2 output of the car in question, which of course has a direct impact on company car tax. Diesels generally emit less carbon dioxide, and thus cost less to tax. Since 2002 this difference has been redressed by the Government via the 3 percent diesel levy on Benefit-in-Kind tax, as diesels emit other nasties which must be accounted for. The surcharge was due to be dropped in April 2016, however on the back of last year’s Volkswagen emissions scandal, it’s now been extended until at least 2021.
Another factor is that the P11D prices of diesel cars are generally higher than petrol cars, so that will impact your tax calculations too.
Driving
Traditionalists may argue that petrol cars are better to drive than diesels. The main reason for this is that diesel cars have a much smaller power band, so you generally get more torque but spread over a smaller rev band. This problem is amplified by turbocharging, which is employed on most diesel engines these days to improve efficiency.
The upshot is that you often have to wait for the turbocharger to ‘wake up’ before the car’s performance is unleashed. After the surge, it’s time to change gear again as the torque tapers off.
In a typical petrol car power builds in relation to the revs, meaning more usable performance more of the time. It’s extremely satisfying chasing the needle to the red line on a petrol car, but others may prefer the lazier, lower-rev driving style of a torquey diesel.
Petrol engines are generally smoother than diesels, though premium manufacturers such as Jaguar and Audi are now building larger-capacity diesels which are almost silky smooth.
Case study
What is it?
One of the most popular company cars here in the UK, the latest Audi A4 was launched in 2015 and brought with it new advanced on-board tech, unrivalled interior quality and a suite of petrol and diesel engines with impressive headline figures.
The two engines we are comparing here are as follows:
Petrol: 2-litre TFSI 187bhp S-Tronic – P11D: £30,125
Diesel: 2-litre TDI Ultra 187bhp manual – P11D £30,945
Running costs
Petrol: 55.4mpg, 116g/km CO2, BIK for next three years for a 20 percent taxpayer*: £3,976.50
Cost in fuel over 10,000 miles per year for next three years: £2,589**
Diesel: 72.4mpg, 102g/km CO2, BIK for next three years for a 20 percent taxpayer*: £4,084.74
Cost in fuel over 10,000 miles per year for next three years: £1,982.64**
Difference in tax: petrol is £108.24 cheaper
Difference in fuel: diesel is £606.36 cheaper
Performance
Petrol: 187bhp, 320Nm of torque, 0-62mph in 7.3 seconds, 149mph top speed
Diesel: 187bhp, 400Nm of torque, 0-62mph in 7.7 seconds, 130mph top speed
Paid mileage
This is based on an average mileage of 10,000 miles per year. If you cut the miles significantly, you’ll also cut the difference between petrol and diesel costs. That’s also assuming you pay for all of your own fuel – most fleet drivers have at least a percentage of their fuel covered by their company, which again is going to drive the difference down considerably.
Conclusion
You can see that both Audi A4s are very close in tax costs over a three-year period, clearly demonstrating how much cleaner petrol engines have become – plus with the continuing diesel surcharge in play, petrol can sometimes be a cheaper alternative each month.
In this case, diesel is the far superior choice when it comes to fuel economy – just remember it really depends on how many miles you have to pay fuel for, the types of journeys you do and how much you value the more rewarding engine in the petrol model.
*Total BIK tax cost is calculated based on the P11D price and the tax bands for the next three years (2016/17, 2017/18, 2018/19). All costs are correct at time of publication
**Based on official average fuel consumption figures and the UK average fuel prices from petrolprices.com on the 31st of March 2016 – 105.25p diesel, 105.26p petrol
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