Petrol increasingly attractive, for lease cars too

posted on June 02, 2016

Aartselaar, 3 June 2016 - The annual study conducted by Alphabet Belgium concerning the tipping point between driving on petrol, diesel or electricity shows that incorporating petrol vehicles into the fleet is becoming increasingly attractive. The lease company analyses the best choice of engine for drivers annually, based on the purchase price, tax, non-deductible VAT, consumption and residual value. Whereas previously diesel was preferred, petrol vehicles are assuming a remarkably competitive role, also with higher annual mileages.

As a leading lease company in Belgium and Europe, Alphabet considers up-to-date and targeted advice related to mobility to be of major importance. The company analyses the price of the most popular vehicles on the market, based on the Total Cost of Ownership (TCO), annually. A company can select the most suitable car or engine based on these general trends in the market and depending on its own business activity.

Findings per segment*

In the compact segment, petrol vehicles have a clear advantage with an annual mileage of up to 20,000 km and a duration of 60 months. In contrast with previous years, petrol vehicles with a shorter duration are a more optimal choice even with annual mileages up to 35,000 km. CNG vehicles in this segment have a lower TCO and are a cost-effective alternative. On the other hand, electric vehicles are less favourable. Considering the higher purchase price, their TCO is higher.

Examples of vehicles in this segment: Citroën C1, Opel Adam, Volkswagen Up!
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In the economy segment, there is a noticeable shift of the tipping point between diesel and petrol. Anyone driving 20,000 - 25,000 km per year with a duration of up to 60 months is better off opting for a petrol vehicle. Even with an annual mileage of 30,000 km and a shorter duration of 24 months, petrol is more cost-effective. Drivers who want to drive sustainable can choose for a hybrid vehicle, considering it has a favourable TCO even with higher annual mileages and lower durations. Fully-electric vehicles were until recently non-existent in this category, but now form an excellent alternative for reducing CO2 emissions and fuel consumption.

Examples of vehicles in this segment: MINI Hatch, Ford Fiesta, Renault Captur
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In the middle segments business and business+, petrol vehicles are gradually coming into the foreground. Whereas last year diesel was the most recommended fuel from 20,000-25,000 km per year, this year the tipping point has shifted to 25,000-30,000 km and so opting for a petrol engine is also shown to be more cost-effective with higher annual mileages and shorter durations. From these segments up, hybrid and electric vehicles are also finding their place among traditional motorisations and are also a good choice from an economic perspective. Electric vehicles such as the Volkswagen e-Golf, Mercedes B Electric Drive or the BMW i3 have a higher purchase price, but in most cases they have a lower TCO, thanks to favourable tax reductions, economical consumption, low CO2 emissions and a lower Benefit in Kind.

Examples of vehicles in the business segment: Audi A3, Volvo V40, BMW 225xe Active Tourer
Examples of vehicles in the business+ segment: Audi A4, Volkswagen Passat, BMW 3 Series
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In the executive and luxury segments, a slight development with respect to previous years is noticeable. In both categories, which include larger, luxury vehicles and some premium makes, the traditional diesel engine is generally more cost-effective. However, some petrol vehicles have a slightly more favourable TCO with an annual mileage of 10,000 km or less.

The luxury segment is also still characterised by the wide choice in hybrid vehicles. With high mileages, these sustainable vehicles can often be leased at a cost comparable with their diesel variants.

Examples of vehicles in the executive segment: Volvo XC60, Mercedes E Class, BMW 5 Series, Lexus GS 300h
Examples of vehicles in the luxury segment: Audi A7, Mercedes CLS, BMW 7 Series, Tesla Model S

Shift in tipping point to petrol

There are several reasons for the noticeable shift in the tipping point towards petrol, particularly in the middle segments. For instance, not only do petrol engines have a lower purchase price, they are also cheaper to maintain. Moreover, fuel consumption has significantly improved in the last few years. Innovation and sustainability are becoming increasingly important, also for car manufacturers. In the quest for sustainable alternatives, the development of new technologies for petrol engines has moved ahead rapidly. Finally, due to the market’s increasing interest in petrol vehicles, the residual values of petrol vehicles are being estimated increasingly favourably.

*Always subject to the model and type of vehicle.

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About Alphabet

As one of the market leaders for business mobility in Europe, Alphabet helps companies to manage their vehicle fleets efficiently and sustainably. Alphabet was formed in 1997 as a division of BMW Group and has built up extensive knowledge in the field of international vehicle fleet management and leasing. The extensive service includes both advice and financing. Alphabet business mobility solutions are all tailor-made in order to meet specific business needs.

With a database of over 600,000 vehicles of all makes in 19 countries, the organisation is one of the top four players on the market. In Belgium Alphabet now operates more than 46,000 vehicles and is among the top three.

With its expertise and technology, Alphabet leads the way in the field of Advanced Mobility Solutions: Alpha Electric offers companies extensive e-Mobility solutions, whilst Alpha City offers a cost-cutting Corporate Car Sharing arrangement. You will find more information on www.alphabet.be.

Contact

For further information, please contact: Ann Massart, Press relations, Alphabet Belgium

03/459.59.71, ann.massart@alphabet.be.