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The great diesel dilemma (continued)

Date: 21 August 2007

As petrol and diesel prices near parity business car managers must follow our example and do their maths before committing to one fuel or the other, writes John Mahoney

Driver one

Car: Vauxhall Astra SXi 5dr
Business miles: 5000 a year
Personal miles: 5000 a year
Income tax: 22%

Driver one is a low-mileage fleet driver with a hatchback. Usually, the smaller the car, the less the difference between the two fuels in terms of economy, therefore there is less reason to pay the premium for diesel. That's partly borne out in this example, with petrol just pipping diesel.

Driver one
Petrol 1.6 16v 115PSDiesel 1.7 CDTi 100PS
P11D price£14,875£16,185
Fuel£5117 £4148
Cost per mile28.1p27.1p
Fuel consumption43.5mpg55.4mpg
CO2 (BIK tax)156g/km (18%)138g/km (18%)
Insurancegroup 7group 6
Top speed/0-62mph 119mph/10.9secs112mph/11.5secs
Costs difference for 3yrs/30,000mls
Tax (22%)- £156
Fuel £641-
SMR £118 -
Depreciation - £616
Overall difference- £13

VERDICT: Petrol's cheaper - but by the narrowest of margins

Driver two

Car: Ford Mondeo Zetec 5dr
Business miles: 20,000 a year
Personal miles: 10,000 a year
Income tax: 22%

Mondeo man here is the epitome of the hard-working rep, racking up a huge 20,000 business miles every year. Go petrol, however, and you'll pay dearly - your fuel bills will be 40% higher than travelling by diesel. This is a fine example of why going diesel can bring rich rewards.

Driver two
Petrol 2.0 140PSDiesel 2.0 TDCi 145PS
P11D price£16,940£18,205
Cost per mile33.1p31.4p
Fuel consumption35.8mpg47.9mpg
CO2 (BIK tax)189g/km (24%)156g/km (21%)
Insurancegroup 8group 8
Top speed/0-62mph130mph/9.7secs130mph/9.3secs
Costs difference for 3yrs/90,000mls
Tax (22%) £760 (22% BIK)-
Fuel £2801-
SMR £229-
Depreciation - £576
Overall difference £3214 -

VERDICT: Diesel - a clear £3214 win

Driver three

Car: BMW 5-series SE auto
Business miles: 10,000 a year
Personal miles: 10,000 a year
Income tax: 40%

Most senior managers would perhaps favour petrol refinement over diesel. But is this financial lunacy? Not if, like our driver, you average 10,000 business and personal miles and the choice concerns a 5-series BMW. Despite a very marginal P11D price premium over the petrol, the diesel misses out, mainly because of the petrol's impressive 37.7mpg average fuel economy on the combined cycle.

Driver three
Petrol 530i SE autoDiesel 530d SE auto
P11D price£35,550£35,910
Cost per mile49.4p47.8p
Fuel consumption37.7mpg42.8mpg
CO2 (tax)178g/km (22%)176g/km (25%)
Insurancegroup 18group 17
Top speed/0-62mph155mph/6.5secs155mph/6.8secs
Costs difference for 3yrs/60,000mls
Tax (40%)- £1388
Fuel £805-
SMR £5 -
Depreciation - £135
Overall difference- £665

VERDICT: Go for petrol - it's cheaper

How we calculated our figures - and how you can do yours

We took two equivalent petrol and diesel engines of a particular car model and added:

. Difference in tax (over time)

. Difference in fuel costs (over distance)

. Difference in maintenance (over distance and time)

. Difference in depreciation (over time and distance)

This gave us an overall cost difference between the two cars.