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Petrol power for Volvo V90 and S90, but T4 comes at a cost

  • New petrol engine for large saloon and estate Volvos
  • Could work out considerably more expensive than diesel
  • Read on to find out why it pays to do your sums...

Volvo has announced a new T4 petrol engine for the S90 and V90 – popular company cars that have until now been available either as diesels or T8 ‘twin engine’ plug-in hybrid models.

This entry-level motor arrives as the noose around diesels’ necks begins to tighten and companies scramble to ensure they can fulfil buyers’ requirements in a world rapidly moving towards petrol power. Its power output is 190hp accompanied by 300Nm of torque, which means 0-62mph in 8.7 seconds - half a second slower than the D4. 

Volvo S90 T4 R-Design

But the headline statistic you need to worry about as company car drivers is the £34,500 and £36,500 P11D values for S90 and V90 respectively.  Volvo claims this keeps BIK tax, which is related to that value and to the CO2 emissions of the car, low enough for the T4 to be a realistic proposition for fleet users.

However, by crunching the numbers we can see all might not be as rosy as it seems. Let’s explain…

Is the Volvo S90 and V90 T4 better than the diesel D4?

It’s certainly cheaper to go for the diesel in BIK terms, despite a £250 higher list price.

Take an equivalent trim and you’ll clearly see the financial implications of plumping for petrol:

Volvo V90 T4 (petrol) R-Design

P11D value: £38,500

CO2 emissions: 156g/km

BIK liability: 30%

Monthly cost for 40% tax payer*: £385

Leather R-Design headrest for a Volvo S90 or V90

Volvo V90 D4 (diesel) R-Design

P11D value: £38,750

BIK liability: 25%

Monthly cost for 40% tax payer*: £323

So there’s a £62 petrol penalty each month, equating to £744 per year.

Claimed fuel economy of 40.9mpg for the T4 versus 62.8mpg for the D4 (with both cars using the same 55-litre fuel tank) means most drivers won’t find it anywhere near as economical to run the petrol. In fact, there aren’t many situations where the petrol will make very much sense at all.

So the D4 should go more than 50% further per tank of fuel, based on Volvo’s own figures: using the claimed economy to work out theoretical ranges you get 495 miles for the T4 and 760 for the D4. Considering fuel prices at time of publication equate to a 2.6p-per-litre difference in favour of petrol, that means a D4 will cost £1.63 more than the petrol, to cover an extra 265 miles. The differences are stark.

Our calculations show the D4 V90 and S90 should be significantly cheaper to run than the T4

Even VED, which is usually a relatively trivial thing when comparing company cars, is notable here because while the D4 will cost £160 in the first year and £140 a year thereafter, the T4 cops for an eye-watering £500 in the first year and £160 after that.

Of course, it’s possible the balance could be reset through business leasing rates, but Volvo has yet to publish these for the T4.

Our in-house expert Finance Editor Chris Lloyd explains: ‘Leasing costs are calculated from the difference between the list price and expected value at the end of the contract.

Judging from Volvo’s own PCP finance figures, we’d expect the diesel D4 to prove better value in leasing terms too – potentially to the tune of £60 per month or so.

If that’s the case, not many company car drivers will want to choose the petrol T4 as it’s likely to cost them more both in leasing terms and in BIK tax. Meanwhile, fleet managers concerned over fuel spend are unlikely to encourage their drivers to choose the thirstier petrol, either.’

Why offer the T4 S90 and V90 at all?

The big issue here is what’ll happen moving forwards with taxation on diesel cars, both in terms of end-user tax and fuel duty, which are both expected to rise as diesel falls further out of favour. Plus petrol is generally far better to drive than diesel.

But alongside the cost and driving implications, there’s public perception to contend with. Diesel is The Devil now in the eyes of the media, and sales figures show customers are moving away.

R-Design sill covers for the Volvo V90 and S90

Volvo Car UK’s head of business sales, Steve Beattie, commented: ‘Petrol is becoming an increasingly popular choice with motorists, including business users. It’s imperative we offer the range of engines that our customers demand, and we expect strong interest in the S90 and V90 T4.’

Six-month waiting list, but don’t let that stop you…

However, if you do want to order one of the new T4 Volvos, you’ll have to wait a while. We’ve heard reports of six-month waiting lists from certain Volvo dealerships.

But to sweeten the pill a little, if you're an existing Volvo customer and do place an order, then subsequently have to wait, Volvo can offer a replacement car to cover the period between your current contract ending and your new S or V90 arriving. 

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