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The Diesel Debate

The Diesel Debate

It’s a dirty business. We have seen the London Mayors office switch its justification for the congestion charge from congestion management to cleaner air management. Diesel was the answer and the government altered its tax collection process to encourage company car drivers to make the change. Petrol was as bad as cigarettes (which had to be banned ), but now it seems we have all been smoking non tipped senior service and the government got the wording down the side of the packet, setting out its health warning wrong. Diesel is apparently extremely bad for your health!

So if you’re running a fleet of diesels you might be understandably confused especially if you read all about it in the motoring supplements of the Sunday press. As a fleet management company who own and operate thousands of cars and advise our clients on what their fleet policy should be, I have obviously given this matter consideration.

The media has gone a bit mad! The BIK rules have always had a 3% penalty on diesel over like for like CO2 level petrol engines to reflect the extra pollution. May be this wasn’t enough though? In fact this penalty is being removed from April 2016 which further underlines the feeling that the governments are encouraging diesel use.  

I don’t think much will change or if it does it will be very gradual. When the arguments were the other way round diesel only started to become popular when the performance of the engines improved. Diesels used to be rough, noisy and smelly and no amount of financial saving would persuade people to buy them. Today, they are quiet, smooth and have very useable, flexible high torque levels producing a much improved driver experience. High mpg petrol cars don’t have the same driver experience as a diesel yet.

Few private drivers seem to do the sums when choosing a car. RFL is still CO2 based and people generally still don’t look much beyond headline published mpg numbers. These will continue to dominate the decisions and those affected by driving into cities will be few in numbers. Specific clients with city operations may take a view but I suspect many of these have already looked at hybrid or other ultra low emission vehicles. The London changes are not proposed to come in until 2020 and by then most fleet diesels will be compliant.

In short, the financial penalties imposed on diesels would need to be much higher before private buyers, except a few in the cities, will take any notice. Therefore any movement is likely to be gradual. As we understand it, Euro 6 diesels will not be affected by the proposed London charge, and, as these come in 2015, it will only be 5 year old + vehicles which will suffer the charge (as it doesn’t happen till 2020). So this should not be really relevant for fleet operators, although there could be a knock on effect on euro 5 diesel vehicle values at resale.

We do see a potential for movement back into petrol, with the recent introduction of highly efficient petrol engines such as the Ford 1.0. However, a bit like diesel faced many years ago, there is a solid perception amongst companies that diesel for medium to high mileage is the only way to go, and this will take time to shift.

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MARSHALL LEASING LTD is a company registered in England and Wales under company number 156897, whose registered office is situated at Bow Bells House, 1 Bread Street, London EC4M 9BE