One of the biggest decisions you’ll make when choosing a new car is deciding whether to go for petrol or diesel. To make the right call, you’ll need to consider fuel efficiency, environmental impact and a range of associated costs.
As car fuel options have expanded, you’re no longer restricted to choosing between petrol or diesel cars. Now you can also consider adding ULEVs (ultra-low emission vehicles) to your list of options. In this article we help you decide between the following cars:
- Diesel vs petrol
- Petrol vs electric
- Electric vs hybrid
Lease rates, tax and road charges - is diesel better than petrol?
There’s a strong cost argument for choosing petrol over diesel cars. Petrol cars tend to cost less to buy which means a lower up-front cost or monthly lease rate.
Equally, if you’re choosing a new car through a company car benefit scheme, you’ll also find that petrol cars are more cost effective from a tax perspective. That’s because, when a car is provided by your company as a benefit in kind, HMRC taxes you based on:
- The car’s price
- How much carbon dioxide the car emits
- Fuel type: petrol, diesel or hybrid
- Your tax bracket
To encourage consumers to take up cars that produce lower CO2 emissions, the government has applied a 4% tax surcharge on top of diesel cars. This means you’ll pay 4% more in tax for a like-for-like diesel car in comparison to a petrol car. Add this extra cost to the fact that diesel cars tend to cost more and you’ll find that they usually carry the highest tax burden.
At the other end of the tax cost scale are electric cars as they put out no emissions. This means they carry the lowest benefit in kind percentage over the course of a three year lease.
Hybrid cars, that use an electric motor to get more from a tank of fuel, still produce emissions so they do carry a higher tax cost than an electric car. However, one of the many advantages of hybrid vehicles is that they produce less carbon dioxide per kilometer travelled. Which makes them highly likely to trump most petrol or diesel cars when it comes to tax.
However, with new technology under the bonnet, ULEVs tend to be more expensive than petrol or diesel cars. Yet hybrid and electric car running costs can be lower overall as they avoid the fees associated with congestion zones and soon-to-be-introduced clean air zones.
If you live or regularly travel into London or other affected cities this could you save quite a lot of money each year.
Between the extremes of diesel and electric sit petrol cars. They typically cost less in a like-for-like comparison and are treated more favourably than diesel from a tax perspective. Yet they still mean you’ll need to pay emission zone fees and you’ll have to pay more in tax than if you bought a ULEV.
If all this talk of tax has your head spinning, make sure you use the expertise on-hand from your car benefit provider. They’re adept at making tax make sense so give them a call to help you work through the figures.
Lease cost, tax and zone fees are just three of the costs you need to consider. How do the different types of car stack up when it comes to fuel cost?
Fuel economy - petrol or diesel for short journeys?
Diesel cars have historically been known for delivering greater fuel efficiency than their petrol counterparts. Particularly on longer journeys. However, are these fuel savings enough to offset the higher leasing amounts and additional taxes that come with a diesel car?
Data from Which shows that diesel cars are more efficient than petrol by about nine miles per gallon. This could save you up to £200 per year at current fuel prices. Multiply this over the a typical three year lease term and that’s not to be sniffed at.
To find out whether improved fuel efficiency will offset the additional costs associated with diesel, you’ll need to factor in mileage, make and model to your sums - or use this handy calculator.
Of course, you could think beyond fossil fuels and turn to electric.
And that means making a call between electric vs hybrid. Whether purely electric powered cars are a practical solution will depend on how far you drive and where your routes take you. That’s because electric-only vehicles tend to have a limited single-charge range of around 50-100 miles depending on the make and model.
This will be fine if you only undertake short drives or tend to travel in cities with numerous charging points. But if you regularly make longer journeys, or you travel in more rural settings where charging points are few and far between, electric probably isn’t the right solution.
Does that mean you’re back to deciding between petrol or diesel cars? No; you can get the best of both worlds with hybrid vehicles.
By boosting the engine with electricity, the main advantage of hybrid cars is that they travel much further on a single tank of fuel. In some cases up to 550 miles. It’s this combination of improved fuel efficiency, reduced emissions and lower associated tax costs that make hybrids a very attractive prospect.
If you do decide to go all electric, you can expect to enjoy beneficial electric car running costs. The average petrol-fuelled car costs £12 to travel 100 miles whereas electric vehicles cost 75% less at just £3 per 100 miles. Reducing your fuel costs this significantly could mean that electric makes sense for you.
When comparing petrol vs electric cars from an ecological perspective, it’s obvious that electric vehicles’ zero emissions are best for the environment. Next are hybrid cars because they make the most of a single tank of fuel, reducing carbon emissions.
Then, depending on make and model, comes petrol followed by diesel which is often painted negatively for its impact on air quality and higher emissions. If you place a high value on being planet and people friendly, diesel might not be the right choice for you.
As technology improves, you’re no longer restricted to choosing between petrol or diesel cars. In the electric vs hybrid battle, pure electric vehicles currently only make sense for city-dwellers who undertake short journeys. If you need to make longer journeys, the dual fuel advantage of hybrid cars offers a practical alternative to electric, petrol or diesel cars.