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What’s going to power your next company car?

  • Are you struggling to decide between fuels?
  • We explain the pros and cons
  • Have your say in our poll

Petrol or diesel?

It’s a question almost as old as the company car itself and one that requires a great deal of thought as there are pros and cons for each choice.

Diesel has been the preferred fuel for many years now. Greater fuel economy and low CO2 emissions mean cheap BIK tax bills, despite diesel cars usually coming with higher P11D prices.

It's not as clean cut in 2016 though. Diesel has received a great deal of negative press over the past 12 months, plus the three percent surcharge, instead of being scrapped in April as planned, will now remain in place until at least 2021.

Petrol technology has also come on in leaps and bounds over the past few years, so much so that in some cases it can be the more cost-effective choice. Matching diesel fuel economy and emissions sometimes mean downsizing the engine, which can mean a sacrifice in performance.

That said, petrol motors are generally smoother and more refined on the road and in a lot of cases more economical if city-based.

What about hybrids or electric cars?

The key advantage of hybrids and electric cars for company drivers is the low-tax and running costs they offer. There are many factors to consider though, range being one of the biggest sticking points.

A 100-mile range for real world driving is generally achievable for more recent electric vehicles, but only if you use the car as a city run-around; drive on the motorway for a few miles and you'll quickly see the range disappear.

Charging can be a real issue too. If you don’t have easy access to a plug socket outside your home, or your employer has no facility for you to charge the car while at work, it could be virtually impossible for you to charge the car fully each day.

Hybrids are almost always going to cost more than a comparable diesel (the Mitsubishi Outlander PHEV is an exception), but the substantially lower BIK tax bands - until 2018 at least - should outweigh the price premium in most cases.

More commonly paired with a petrol engine, a hybrid is not usually as economical as a diesel alternative when the combustion engine takes over, so utilising the electric power is key to achieving good fuel economy figures.

Which choice is right for you?

It really depends on how many miles you drive and where most of your journeys take place.

If you're a high mileage driver who spends a fair amount of your commute on the motorway, diesel is still likely to be the superior choice overall.

However, you're city-based and travel shorter journeys, there's an argument for both petrol, hybrid and electric cars here.

Hybrid and petrol cars offer greater flexibility day-to-day, although will cost more to tax than electric. Hybrids offer the best of both worlds, although you'll need to utilise the electric range to get the best running costs, especially if you pay for your own fuel.

For more pros and cons and information on petrol, diesel and electric, read our guide here.

Have your say in our poll