IN these green-aware times, selecting cars which limit a fleet's impact on the environment is becoming more important, but do these vehicles make financial sense?

Running a green fleet that is environmentally- friendly and yet still economically viable is the holy grail for many fleet operators.

But even as recently as a few years ago, running a green fleet mostly meant scurrying around in the deep, darkened recesses of manufacturers', importers' and converters' buildings trying to find a hotch-potch solution to your company's needs. Being green meant taking the eccentric, compromised and risky route.

Increasingly this is not the case. Car manufacturers are now at the stage where they are offering perfectly viable alternatively-fuelled cars, with the two principle power sources at the present being liquefied petroleum gas (LPG) and petrol/electric hybrids. With LPG, we have chosen cars from the two high-volume fleet manufacturers, and two of the few to offer converted cars direct: the Vauxhall Astra and Ford Focus. The number of filling stations with LPG is increasing all the time and the fuel certainly emits less CO2 than petrol, although fuel economy is generally about 10% to 15% worse.

This is offset at the moment by its cheap price (about 39-42p per litre compared with about 80ppl for petrol) and although the Government seems to be backing LPG, many fleet operators are concerned that if the Treasury so wishes it could raise tax on it and wipe out any advantages at a stroke.

The problem LPG cars also have is that public acceptance of the fuel is low, particularly as a secondhand option, and as a result residual values are poor. The LPG industry believes this will change, particularly as people realise that cars powered by the fuel are exempt from the London congestion charge. Time will tell. Until genuinely ground-breaking hydrogen-powered cars make it to market, hybrids will have to carry the flag for electric driving. Using an electric motor at low speeds, the cars then switch to petrol power at higher speeds, saving fuel and cutting emissions.

Toyota and Honda have pioneered this area. Toyota launched the first petrol/electric hybrid that could be labelled 'practical' with the Prius, although it has been around for a few years now and may be paying the price for being the first. It looks quirky, which may put the average fleet driver off. Then again, if it's good enough for Leonardo di Caprio (who drives one), it should be good enough for Derek from sales. Honda struggled along with the two-seater Insight for a while, which worked very well but looked like one of those vehicles Californian students build for green car competitions.

Now, Honda has its the Civic IMA which looks, feels and drives normally, which is just how it was planned: driving an alternatively-fuelled car does not have to mean that people stop and point. Its normality should be good for the leasing industry – it can predict with more certainty residuals and running costs. But we are talking about business here, and not many decisions at boardroom level are made on the justification that 'we're doing our bit for the environment'.

In many cases, grants for these cars are available, but are not included in this survey. It has to make financial sense, so we have included petrol and diesel 'controls' in the form of the Nissan Almera and Renault Megane. Both are very low on emissions and very low on benefit-in-kind tax. Running either could keep the fleet manager, the board and the driver happy.

Michael Beet
Sales director, Inchcape Fleet Solutions
'There is no doubt that carbon dioxide-based benefit-in-kind tax changes have had the desired effect in encouraging drivers to select greener cars. At the moment the recommended option is to choose a clean diesel, preferably one that meets Euro IV standards. The popularity of LPG will increase over the next five years but eventually will make way for hybrids, as they have no need for alternative fuel outlets.'

Andrew Cope
Managing director, Zenith Vehicle Contracts
'While there is a myriad of green options available, the case for many of these fuels from a cost, practicality and driver acceptance perspective is not strong. The most attractive green option is LPG, particularly if the fuel is bunkered. LPG provides cost-effective motoring, a comprehensive refuelling network, similar performance to petrol and diesel and, importantly, a high level of driver acceptance.'

Tracy McMahon
Pricing manager, Lloyds TSB autolease
'Every professional fleet manager today must consider clean fuel vehicles as a part of their fleet strategy. With the likely spread of congestion charging to other cities in the UK following the example set by the scheme in London, and the emergence of Low Emission Zones in the capital, the environment is fast becoming one of the key issues facing fleets. These vehicles offer very attractive solutions.'

Richard Schooling
General manager sales operations, Alphabet
'Until recently, alternative cars have tended to seem either fussy (dual-fuel conversions) or slightly odd (lightweight hybrids on skinny tyres). Now, with factory-fitted bi-fuel engines and Honda's mainstream-looking Civic IMA, the sector is coming of age. There's more choice for fleet decision-makers but making the right decision still depends on what green objectives you're trying to achieve.'

David Harnett
Head of LeasePlan Fleetline
'In line with the Government's objective of achieving a greener environment, the ever-increasing cost of fuel and new initiatives such as congestion charging, manufacturers are looking at various different ways to beat the system. Until the availability of LPG increases, hybrid cars become more accepted, and petrol fuel efficiency is improved, the traditional diesel car is always going to be the first choice.'

Vital statistics

Average rental rates
Renault Megane £251
Nissan Almera £254
Honda Civic IMA £307
Vauxhall Astra BI FUEL £308
Ford Focus LPG £314
Toyota Prius £371

  • Average based on results from our leasing panel

    Average maintenance costs (3years/60,000 miles)
    Renault Megane £1,403
    Vauxhall Astra BI Fuel £1,433
    Toyota Prius £1,449
    Nissan Almera £1,466
    Honda Civic IMA £1,466
    Ford Focus LPG £1,517

  • Average based on results from our leasing panel

    RV forecasts (3years/60,000 miles)
    Renault Megane £3,921/31%
    Honda Civic IMA £4,403/30%
    Nissan Almera £3,364/26%
    Ford Focus LPG £3,567/24%
    Toyota Prius £3,680/23%
    Vauxhall Astra BI FUEL £2,975/21%

  • Average based on results from our leasing panel

    CO2 emissions (g/km/tax band)
    Honda Civic IMA 116/13%
    Toyota Prius 120/13%
    Renault Megane 120/18%
    Vauxhall Astra BI FUEL 151/14%
    Nissan Almera 158/15%
    Ford Focus LPG 170/17%

  • Source: Vehicle Certification Agency (2003/04 tax year)

    Combined mpg
    Renault Megane 61.5
    Honda Civic IMA 57.6
    Toyota Prius 55.4
    Nissan Almera 42.8
    Vauxhall Astra BI FUEL 30.4
    Ford Focus LPG 26.6

  • Source: Vehicle Certification Agency

    Honda Civic IMA 1.3 VTEC SE Executive

    ##CivicIMA2003--none##

    Harnett: 'The Civic has low CO2 emissions, good fuel economy and with it being a hybrid it qualifies for a 100% discount for London's congestion charging. Practicality is excellent, boot load space is hardly affected by batteries being neatly packaged into the rear seats.'
    Beet: 'A truly desirable alternative fuel vehicle. Looks great and has proved its popularity in a very competitive market segment. The introduction of the hybrid engine will make people sit up and look seriously.'
    McMahon: 'This looks, feels and drives like a Civic but at a price that is very competitive. It's a little strange to have the engine shut down when the handbrake is on and it is running idle but it does drive very well.'
    Cope: 'The Honda is a well specified mid- range vehicle. The combination between petrol and self-charging electric make this car an attractive and practical option.' Schooling: 'This is how a hybrid should be: well-made, well-equipped, advanced underneath but outwardly conventional. It's nippy to drive and unfussy to refuel. Honda has put the hybrid cat among the green pigeons.'

    Average monthly rental £307
    P11D price £14,870
    Average net price £11,993
    Average maintenance £1,466
    Average RV £4,403/30%

    Rental Rates
    Inchcape £282.70
    Zenith £307.16
    Alphabet £295.23
    LeasePlan £331.80
    Lloyds TSB autolease £316.24

    2003 CO2 BIK tax bill (22%/40%): £425/£773
    2003 VED bill: £90

    Toyota Prius 1.5 VVTi hybrid auto

    ##PriusVVTi--none##

    Beet: 'The car that sparked interest in hybrids in the UK. The technology is a marvel and has sold well in Japan, but the looks of the vehicle let it down, alongside the high price tag.'
    McMahon: 'The appeal of this car may be limited by its looks. The dashboard layout and driving position are unusual but it will carry five passengers and luggage. It performs very well with huge reductions in CO2 and mpg. But its residual position is one of the poorest and the capital cost of the Prius is very high.'
    Cope: 'This is the least practical of the vehicles. The cutting-edge technology and design has reduced the luggage space and overall performance of the Toyota.' Schooling: 'The Prius scores well on benefit-in-kind tax but it looks too unusual for many drivers' tastes. It was a pioneering effort from Toyota but now the Civic is simply better value.'
    Harnett: 'The Prius was revolutionary when it was launched but is starting to look slightly dated. Due to its unique looks it has limited appeal and this has an impact on the residual value and, consequently, the monthly rental rate.'

    Average monthly rental £371.00
    P11D price £16,315
    Average net price £13,338
    Average maintenance £1,449
    Average RV £3,680/23%

    Rental Rates
    Inchcape £392.16
    Zenith £371.43
    Alphabet £347.02
    LeasePlan £363.85
    Lloyds TSB autolease £380.55

    2003 CO2 BIK tax bill (22%/40%): £467/£848
    2003 VED bill: £90

    Vauxhall Astra 1.6i 16v LS BI FUEL

    ##AstraBifuel--none##

    McMahon: 'A very good performance and build standards. The car doesn't seem any different to a petrol or diesel although as with all LPGs, fuel consumption is slightly compromised.'
    Cope: 'The Astra now has a dated image, but the introduction of the dual-fuel has made this car more attractive with low emissions, reduced fuel costs and congestion charge exemption.'
    Schooling: 'Drivers won't gain much in BIK over a diesel but they certainly save on fuel costs. Being factory built it's less hassle than a conversion but you still lose the spare wheel to the LPG tank.'
    Harnett: 'The Astra is a good solid car and with the addition of the dual-fuel option is also competitive on running costs. Unfortunately the used car market is not as keen on these vehicles and the residual value reflects this.'
    Beet: 'Vauxhall are the champion of LPG in the UK, with a good range of models. More and more LPG outlets are increasing the popularity of this type of vehicle. The BIK position is low and companies can normally attract a PowerShift grant. This is likely to sell very well.'

    Average monthly rental £308
    P11D price £14,380
    Average net price £11,276
    Average maintenance £1,433
    Average RV £2,975/21%

    Rental Rates
    Inchcape £317.39
    Zenith £282.45
    Alphabet £278.21
    LeasePlan £312.73
    Lloyds TSB autolease £350.86

    2003 CO2 BIK tax bill (22%/40%): £443/£805
    2003 VED bill: £110

    Ford Focus 1.8 Zetec LPG

    ##FocusTDCi--none##

    Cope: 'The LPG version maintains the great driving experience of the Focus and handsome interior space, providing drivers with attractive, well-balanced and cost-effective motoring.'
    Harnett: 'A great car and the addition of the LPG tank can only enhance this despite the loss of boot space. Residual value is not particularly strong and this has an impact on rentals. Add to this the limited availability of LPG stations and the Focus starts to lose appeal.'
    Beet: 'Ford does not have as much experience in this sector, nor does it have as many models as Vauxhall. On the other hand the Focus is always a popular choice.'
    McMahon: 'This has just been launched but looks set to be extremely popular with UK fleets with stunning driveability and ergonomics. MPG is a little down, but with the low cost of LPG the wholelife costs become very attractive. RV and the costs of maintaining the Focus will be similar to the Vauxhall.'
    Schooling: 'Giving the class leader the factory bi-fuel treatment instead of relying on dealer conversions should make it a winner with drivers looking for easy registration for congestion charging and similar exemptions.'

    Average monthly rental £314
    P11D price £14,730
    Average net price £11,614
    Average maintenance £1,5176
    Average RV £3,567/24%

    Rental Rates
    Inchcape £276.37
    Zenith £318.00
    Alphabet £308.97
    LeasePlan £342.26
    Lloyds TSB autolease £325.47

    2003 CO2 BIK tax bill (22%/40%): £551/£1002
    2003 VED bill: £130

    Renault Megane 1.5 dCi 80 Dynamique

    Schooling: 'If you like the styling and classy ride, you'll love the 61mpg fuel economy. Sadly there are no concessions from Ken Livingstone or Gordon Brown despite its lowly 120g/km CO2 rating.'
    Harnett: 'Has to be the pick of the bunch. It has class-leading safety features, superb styling and a great equipment list. Add to this class- leading CO2 and outstanding MPG and the package is almost complete. Only chink in the armour is the performance, which is modest.'
    Beet: 'This car will sell very well as people get used to the unusual styling. The advertising campaign is working wonders and we will see more of these very green diesel models around.'
    McMahon: 'An acquired taste. The Megane offers excellent economy and is a great choice for those people who want a car that stands out. It is more reasonably priced than the alternatively-fuelled models but still offers good fuel economy and emissions ratings.'
    Cope: 'The styling will not suit everyone's tastes, but the performance and specification levels make it an impressive, economical and environmentally friendly proposition.'

    Average monthly rental £251
    P11D price £12,595
    Average net price £10,674
    Average maintenance £1,403
    Average RV £3,921/31%

    Rental Rates
    Inchcape £262.49
    Zenith £262.07
    Alphabet £241.89
    LeasePlan £240.49
    Lloyds TSB autolease £247.72

    2003 CO2 BIK tax bill (22%/40%): £499/£907
    2003 VED bill: £110

    Nissan Almera 1.5 SVE

    ##AlmeraSVE--none##

    Harnett: 'The Almera struggles to keep up with its peers. Although it is well built, the interior and exterior looks are less then inspirational. On the positive side CO2 emissions are low and the MPG is good for a petrol engine. The rentals are also competitive.'
    Beet: 'Styling modifications are good but a completely revamped model will be launched in 2004. Harmful emissions are surprisingly low, but it does suffer on fuel consumption. Residual values are not good.'
    McMahon: 'This is slightly more expensive than the new Megane and doesn't boast the same fuel economy and CO2 emissions. The equipment levels are good but the Almera doesn't offer the style that the Megane has.'
    Cope: 'This is a solid, well-specified car offering drivers a low emission petrol car. Unfortunately it will suffer due to the attractiveness of other family favourite models such as the Focus and new Megane.'
    Schooling: 'The BIK rules mean the Almera's driver pays less tax than the Megane although the Nissan emits 30% more greenhouse gases. Sunderland's refreshed contender warrants a second look.'

    Average monthly rental £254
    P11D price £12,855
    Average net price £9,987
    Average maintenance £1,457
    Average RV £3,364/26%

    Rental Rates
    Inchcape £244.41
    Zenith £254.78
    Alphabet £255.84
    LeasePlan £244.42
    Lloyds TSB autolease £272.18

    2003 CO2 BIK tax bill (22%/40%): £424/£771
    2003 VED bill £120