FINANCE directors, fleet managers and drivers are being warned to look at the 'big picture' and tread carefully when devising company car choice lists and selecting their next company cars.

Adrian Rushmore, managing editor of Glass's Guide, said employers and drivers should not base their choices solely on a vehicle's carbon dioxide emissions, even though the new company car tax system will be based on CO2 emissions.

'They must look at the wider picture taking into account the car's P11D value, how much of that is taxable under the new tax regime and what they will pay as a 22% or 40% taxpayer,' said Rushmore.

Under the new rules, drivers will pay tax on a combination of a car's P11D price and its CO2 emissions. There is also a three percentage point penalty on diesel vehicles that do not meet Euro IV emission standards.

'Drivers must do the complete calculation before making a decision. They must find out in real terms the percentage of the P11D price they will have to pay on their car,' warns Rushmore.

Research conducted by Glass's found that out of 50 cars with tax-beating low CO2 emissions, 40 of the 50 were diesel. Top of the emissions league was the Audi A2 1.4 diesel, which emits 116 g/km of CO2.

Peugeot will launch 1.4 HDi versions of the 307 before the end of the year, which will have CO2 emissions ranging from 90–110g/km depending on the power output.

Rushmore said: 'Drivers and fleet managers are switched on to the fact that diesel engines generate low CO2 emissions, return excellent fuel economy and offer strong residual values.'