Company Car - Petrol or Diesel

nutmegman

Anyone have any thought on which fuel to go for

AdrianHi

nutmegman wrote: »

Anyone have any thought on which fuel to go for

Completely depends on which car and which two engines you are considering side by side.

For example, if you compare a BMW efficient dynamics 318i (petrol) 47mpg 15% BIK tax with 318d 18% BIK tax 58mpg, the petrol works out cheaper due to the low BIK tax charges and still very economical and low CO2 petrol engine.

Most other cars and the result will be diesel just to get the CO2 and therefore BIK tax down.

What cars are you considering?

Hintza

Also depends on how many miles you are doing.

AdrianHi

Hintza wrote: »

Also depends on how many miles you are doing.

This is starting to become a misconception these days. For company cars issues like the BIK level, the purchase price of the car, depreciation / lease price have such a big impact on the monthly cost that it takes even 10K miles per year one way or the other doesn't change which comes out cheapest - on the above cars in a private purchase scenario 10,000 miles only changes the relative difference between the two cars by £15 - out of a total cost in the £700 to £800 a month range.

Hintza

I was also going to add that with the premium you are pauing for diesel these days it is also less clear cut.

Can I ask what BIK is? (I'm sure I should know)

AdrianHi

Hintza wrote: »

I was also going to add that with the premium you are pauing for diesel these days it is also less clear cut.

Can I ask what BIK is? (I'm sure I should know)

It is the increasing price premium on diesel and also the fact that some manufacturers are starting to do a good job of reducing CO2 of their petrol engines.

BIK is a term you only come across when you start looking into company cars.
Benefit In Kind tax for the benefit of having the company car available for private use. Calculated as a percentage of the cars list price where the percentage is dependant on the cars CO2 emissions. You then get taxed on that figure at whatever PAYE rate you pay (22% or 40%). Higher CO2 cars and the BIK tax bill rises rapidly.
The is a +3% penalty on diesels, even then as most petrol cars are heavy on CO2 diesels usually work out best. In the case of the 318i (15% BIK rate) and 318d (18% BIK rate) CO2 emissions are similar so the 318i works out costing you less as it does not get the 3% diesel penalty.
This makes the 318i cheaper by far for company car users.