Should you buy a Euro III or IV diesel?

26 January 2005

Private and company motorists could save cash by choosing an outgoing Euro III diesel engine this year.

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Private and company motorists could save cash by choosing an outgoing Euro III diesel engine this year.

Under new emissions rules, manufacturers will not be allowed to sell the engines from January 2006, but plenty are still available – from Alfa ’s 156 compact executive to the Volvo XC90 4x4.

Many of the outgoing diesel engines offer better fuel consumption than the Euro IV-compliant engines and could save private motorists cash at the pump. List prices also tend to be lower because the engines are not fitted with costly parts needed to meet the tougher standard.

Ford, for instance, charges up to £350 more for Euro IV diesel engines in its Focus, Mondeo and C-Max, which it is currently selling alongside otherwise identical Euro III versions. Jaguar also increased X-type prices by £500 when it upgraded the car’s diesel engine to Euro IV.

Company car buyers could also save money by opting for Euro III engines. Euro IV diesel engines do not attract the 3% company car tax penalty this year but they will when registered from January 2006. Their higher list price will then mean higher tax bills than Euro III cars’.

Although the reduction in emissions, such as particulates and nitrous oxides, means the engines qualify for the Euro IV benchmark, some have increased carbon dioxide output. It is carbon dioxide that is used by the Treasury to calculate a car’s tax band.

That means some new Euro IV diesel cars will actually be in a higher tax band than their Euro III predecessors from next year. The saloon version of the Jaguar X-type diesel is a case in point.

To find out if the diesel car you’re considering qualifies for the Euro III or Euro IV standard log on to the Government’s database at www.vca.gov.uk.