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Petrol increasingly attractive, for lease cars too

Petrol increasingly attractive, for lease cars too

Aartselaar, 13 February 2019 - 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. In three years’ time, the share of petrol vehicles has grown from 2% to 35% in order intake at Alphabet Belgium. The trend towards petrol vehicles is clearly being followed in the fleet market. Whereas previously diesel was the consistently preferred choice, petrol vehicles continue to assume an increasingly competitive role, even now with higher annual mileages.

Compact and Economy

In the compact segment we encounter for all mileages and durations an advantage for petrol powered vehicles. Bear in mind that most models in this segment are only available in petrol version. A few exceptions are the CNG-engines available in e.g. Fiat Panda and Volkswagen Up. These vehicles have a TCO that is on average € 70 per month lower than its petrol equivalents. 

In the economy segment, petrol cars usually have a lower TCO, with the TCO for diesel cars only being more advantageous at higher mileages (40000km / 48 months). Good alternative fuel options are the Suzuki Swift (available both as petrol hybrid and petrol plug-in hybrid) and the Toyota Yaris (petrol hybrid). These cars have a lower TCO than most other economy vehicles, even on higher mileages and longer durations.

Compact (e.g.: Citroën C1, Opel Adam, Volkswagen Up!)
Compact (e.g.: Citroën C1, Opel Adam, Volkswagen Up!)
Economy (e.g.: Audi A, Ford Fiesta, MINI Hatch, Volkswagen Polo)
Economy (e.g.: Audi A, Ford Fiesta, MINI Hatch, Volkswagen Polo)

Business and Business+ 

New developments in recent years secure the competitive position of petrol powered vehicles on many mileages in the Business segment. It is usually beneficial to choose a petrol engine up until 25000 km per year for a contract duration of 48 months or more. 

Electric vehicles (such as the Hyundai Kona, VW e-Golf, and Peugeot Ion), petrol hybrid (such as Toyota Auris, Kia Niro, or Lexus CT) petrol plug-in hybrid cars (such as the BMW 2-series, MINI Countryman, and Toyota Prius) are significantly more expensive in purchase price than the average car in this segment, which leads to a higher lease rate. However, because of the high fiscal deductibility and low fuel consumption, the TCO after fiscal and tax impacts is comparable to the non-electric variants, especially on higher mileages.  

Another important segment is the business+ segment. The tipping point is lower in this segment. Diesel engines are more favourable starting from yearly mileages of 25000 km for 48 month contract durations.  In these segments, cars with alternative fuels usually have lower TCO than the petrol and diesel cars. Some cars are available in different fuel types, such as electric (BMW I3), the petrol hybrid (Ford Mondeo, Mercedes C-class, Lexus IS), diesel hybrid (Hyundai Tucson), and petrol plug-in hybrid (Volvo V60, Kia Optima and Mitsubishi Outlander).

Business (e.g.: Audi A3, BMW 1 and 2 series, Mercedes A, Volvo V40, Volkswagen Golf)
Business (e.g.: Audi A3, BMW 1 and 2 series, Mercedes A, Volvo V40, Volkswagen Golf)
Business+ (e.g.: Audi A4, BMW 3 Series and X1, Mercedes C-Class, Volkswagen Passat)
Business+ (e.g.: Audi A4, BMW 3 Series and X1, Mercedes C-Class, Volkswagen Passat)

Executive and Luxury 

In the Executive segment we find the larger sedans and SUVs. In this segment there is a clear TCO advantage for diesel engines, resulting in diesel engines usually being a better choice than petrol engines. Some alternative fuel options are available however, which have competitive TCO’s. Therefore our advice is to ask for a quote on petrol hybrid cars (such as Mercedes E-class or Lexus RC), petrol plug-in hybrid cars (such as the BMW 5-series, Volvo V90 or XC60) or diesel plug-in hybrid cars (such as the Mercedes E-class). There are no full electric models in this segment today. 

In the small Luxury segment diesel cars have significantly lower TCO’s than petrol cars. 

There is a wide range of alternative fuel types available however, with competitive TCO’s. Options include electric vehicles (Jaguar I-Pace or Tesla models S and X), electric cars with range extender (BMW I8), petrol hybrid (Mercedes CLS, Lexus LS or RX) and petrol plug-in hybrids (such as the BMW 7-series, Mercedes S-class, or Volvo XC90).

Executive (e.g.: Audi A6, BMW 5 Series and X3, Mercedes E-Class Volvo XC60)
Executive (e.g.: Audi A6, BMW 5 Series and X3, Mercedes E-Class Volvo XC60)
Luxury (e.g.: Audi A7, BMW 7-Series and X5, Mercedes CLS)
Luxury (e.g.: Audi A7, BMW 7-Series and X5, Mercedes CLS)

What are the reasons for the shift in the tipping point for petrol?

  • Petrol engines are more cost efficient in purchasing price and maintenance.
  • Fuel consumption has improved tremendously in the past few years.
  • The development of new technologies for petrol engines has moved ahead rapidly.
  • Due to the increasing interest in petrol vehicles, the residual values of petrol engines are estimated more favourably.
  • The price difference between diesel and petrol has become increasingly narrow and fuel prices were fully harmonised in 2018.

Despite the fact that Belgium was until recently a country that favours diesel-powered vehicles, our advice is to always compare the available alternatives, such as petrol variants and other types of drive systems. They are not only beneficial for the environment, they can also have a beneficial effect on the TCO. When calculating the TCO in this study, the current fuel prices were used as basis. Once the fuel price of diesel and petrol has been fully harmonised, the tipping point will shift 5,000 km in the advantage of petrol vehicles. Due to the new tax system, the TCO of PHEV vehicles will evolve in many cases in a negative direction, but will remain more favourable than the diesel or petrol variants. 

About Alphabet 

As one of the market leaders in corporate mobility in Europe, Alphabet helps companies manage their fleet in an efficient and sustainable manner. Alphabet was founded in 1997 as a division of BMW Group and has since acquired extensive knowledge in the field of international fleet management and operational leasing. The comprehensive service it offers includes advice as well as financing. Alphabet’s corporate mobility solutions are tailor-made to ensure that they satisfy companies’ specific requirements. 

With a portfolio of over 680,000 vehicles of all makes in 28 countries, it is one of the four major players on the market. In Belgium, Alphabet currently manages 52,000 vehicles, good for a place in the top three. 

Its expertise and technology enable Alphabet to play a leading role in Advanced Mobility Solutions: AlphaElectric offers businesses extensive eMobility solutions, AlphaCity provides a cost-saving Corporate Car Sharing arrangement and AlphaFlex allows companies to integrate a mobility budget. Our handy application AlphaGuides offers Alphabet drivers almost unlimited mobility.

Contact

For further information, please contact: Marie-Laure Brzezicha, Press relations, Alphabet Belgium on 03 459 59 72, marie-laure.brzezicha@alphabet.be.

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