Beat the Credit Crunch and Rising Fuel Prices with LPG

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A vehicle-leasing company has launched a new business to maximise the growing demand for fuel efficient, greener cars.

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We were sat in the office and looking at our bills and to be honest I knew very little about LPG other than the fact that a friend has had an LPG Land Rover for over 2 years. But when you discover that the price of LPG is 50p a litre and we were paying £1.31 per litre for diesel...95 per cent of our fuel bill is diesel for the vans, and it's a lot of money.

A vehicle-leasing company has launched a new business to maximise the growing demand for liquefied petroleum gas, LPG vans and cars after arranging a deal which saved a client an estimated £500,000 on its fleet of vans.

Square 1 Leasing, based in Lymm, Cheshire, was set up in February by the £22m-turnover IT distribution firm Square1 Products Ltd alongside vehicle and finance provider Andrew Poole. It has now launched LPG Fleet Solutions to target medium-size companies which currently use diesel vehicles.

Poole said the move into LPG was prompted after it supplied four vehicles for Lancashire-based electrical engineering firm Hirst & Danson.

Joe Makepeace, Hirst & Danson's health and safety manager, said the monthly fuel bill for its 26 vans had doubled to £14,000. Makepeace said: "We were sat in the office and looking at our bills and to be honest I knew very little about LPG other than the fact that a friend has had an LPG Land Rover for over 2 years. But when you discover that the price of LPG is 50p a litre and we were paying £1.31 per litre for diesel...95 per cent of our fuel bill is diesel for the vans, and it's a lot of money."

Hirst & Danson, which turns over £13m a year, expects to receive around £70,000 from the sale of its old vans, which is being handled by LPG Fleet Solutions. The upfront costs of leasing the new fleet will mean there is a net cost to the business in years one and two but, by the end of the three-year lease, it predicts to be in profit by £250,000 when compared to the cost of continuing to operate a diesel fleet.

However, the firms have agreed a deal that will let Hirst & Danson keep the vans under a full-service and maintenance agreement for a further two years, leading to a total £450,000 saving over a five-year period.

"The fact that I can gain a new fleet and save myself money seems almost insane when you think about it," said Makepeace.

Poole said the difference between the cost of a new diesel van and a converted LPG was "negligible". The cost of converting a new petrol van to LPG is typically between £1,700-£2,000, making the total cost roughly similar to that of a diesel model.

Conversion to an LPG fleet will also help firms to reduce their carbon footprint by up to 30 per cent. Poole said that this is useful when tendering for public sector work, as quasi-governmental clients such as the Olympic Delivery Authority expect contractors to say how they minimise environmental impact when they tender.

"I'd love to say we were looking at it because we were concerned about our environmental footprint, but really it was all about the numbers," said Makepeace. "When you looked at them it was a no-brainer."

A spokesman for Transport for London said that drivers of "certain alternative fuel vehicles" do not have to pay its congestion charge so long as the vehicle is registered with them, but said potential purchasers could check eligibility against the PowerShift Register -- a register of vehicles approved by the Energy Saving Trust.

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