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Diesel vs Petrol: Choosing the Right Car

Diesel vs petrol petrol vs diesel Diesel Car vs Petrol Car Petrol Car vs Diesel Car Confused Buyer Tips Buyers Guide

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#1

Hersch
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Posted 11 September 2012 - 08:41 PM

Dear Friends! It is a known fact that diesel has become the fuel of choice for a majority of Indian customers. This is evident from the fact that the overall sales figure of diesel cars which stood at a mere 5% about a decade ago now stands at a mighty 40% of the overall cars sold and is increasing at a faster pace than ever.

However, anyone who is out to buy a car is faced with the perennial question on whether to buy a petrol car or go in for a diesel. Which option would provide more value for money in the long run? To arrive at an answer, we would have to look deep into a buyer's behaviour in the Indian context. Some of the things we look at while purchasing a car are:
  • Overall price (price, discounts, freebies etc.)
  • Looks and engine power
  • Fuel efficiency
  • Features (aircon, ICE, safety features etc.)
  • Cost of service and spares
Coming down to the topic on whether your usage justifies buying a diesel car, we can simply do some maths to arrive at a probable solution. For the purpose of calculation, we would make the following assumptions*:
  • Standard average life span of the car - 7 yrs (One would typically sell/ upgrade to a new car post this)
  • Standard average monthly running - 1000 kms
  • Price of diesel car - 10 lacs
  • Overall landed cost of a diesel car - 16 lacs (includes cost of capital)
  • Diesel Fuel Price - Rs. 41/ ltr
  • Average Diesel Car Mileage - 16kms/ litre
  • Diesel Car Service Interval - 1yr or 10,000 kms whichever is earlier
  • Diesel Car Service Cost - Rs. 10,000/ service
  • Diesel Car Repair Costs - Rs. 1.5 lacs over 7 years
  • Price of petrol car - 8.5 lacs
  • Overall landed cost of a petrol car - 13.5 lacs (includes cost of capital)
  • Petrol Fuel Price - Rs. 75/ ltr
  • Average Petrol Car Mileage - 12kms/ litre
  • Petrol Car Service Interval - 6 months or 5000 kms whichever is earlier
  • Petrol Car Service Cost - Rs. 5000/ service
  • Petrol Car Repair Cost - Rs. 75,000 over 7 years
*The above are nearest estimates used for calculation purpose only.

Overall cost of ownership of a Diesel Car
Overall Cost = Landed Cost of the Vehicle + Overall Fuel Costs + Overall Service Costs + Overall Repair Costs
=> Overall Costs = 16,00,000 + {Rs.41/ ltr  x (1000kms per month/ 16kms per litre) x 12 months x 7 years) + (9 services x Rs 10,000 cost per service) + 1,50,000
=> Overall Costs = 16,00,000 + 2,15,250 + 90,000 + 1,50,000
=> Overall Costs = 20,55,250/-

Overall cost of ownership of a Petrol Car
Overall Cost = Landed Cost of the Vehicle + Overall Fuel Costs + Overall Service Costs + Overall Repair Costs
=> Overall Costs = 13,50,000 + {Rs.75/ ltr  x (1000kms per month/ 12kms per litre) x 12 months x 7 years) + (14 services x Rs 5,000 cost per service) + 75,000
=> Overall Costs = 13,50,000 + 5,25,000 + 70,000 + 75,000
=> Overall Costs = 20,20,000/-

The above high level calculation proves that as far as price is concerned, if your monthly running is below 1000 kms, it is not worth spending on a diesel engine car. Anything above 1000 kms/ month would provide you with fuel costs savings but would subsequently inflate your service costs as well.

Now comes the question of engine power and refinement; where petrol provides a more linear and refined performance, modern diesels typically being turbocharged, provide a lot of torque once revved beyond a certain rpm range.

Conclusion: Go for a diesel only if you would be putting on a lot of miles on your odometer; otherwise, a petrol makes better sense anyday.

Cheers
The Taurean Currently Rides: Toyota Corolla Altis GL | Hyundai Santro Xing XL | Maruti Suzuki Swift VDi | Hero Honda CBZ (Original 2001 Model) | and the saga shall continue…

History Sheet: Toyota Innova 2.5 V (07-10) | Honda City 1.5 Exi (01-11) | Honda Accord (06-09) | Yamaha YZF R15 ver 1 (09-13) | Maruti Zen (96-01) | Maruti 800 (87-92 & 92-96) | Ambassador (Two White beauties from the day I was born till 91)

#2

PrancingHorse
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Posted 11 September 2012 - 08:53 PM

Thanks for this Hersch. Thats some useful info there. Can help anyone who is debating between choosing between a petrol and a diesel. One thing I thought I may add. Diesel is right now at Rs. 46 a litre as against what you have commented it being 41

#3

banadictaustin
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Posted 11 September 2012 - 10:45 PM

Thanking you for sharing this nice and difficult calculation, I appreciate for your work and this calculation is very helpful for me and other vehicle users.

#4

librankur
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Posted 12 September 2012 - 10:17 AM

normal diesel does cost 41.32 in delhi, yeah, premium fuel are costlier, 46.29 in delhi for that kind.

more trouble if the govt decides to free these prices , latest under recoveries on diesel per liter are close to rupees 19

diesel prices increased just twice in the last few years .

I have never met a car that i did not like.


#5

AMG1
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Posted 12 September 2012 - 11:23 AM

More and more people are going for diesel cars and I still feel this number isnt that huge pan-India. Good comparison there!
Name says it all.. AMG1

#6

325i
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Posted 12 September 2012 - 12:05 PM

Great calculation @Hersch but you've missed out the most important point - resale value. The resale value of most petrol cars plummets the moment they leave the showroom whilst diesels depreciate far less. If you take this into account then a diesel makes more sense than a petrol car even before it leaves the showroom

To finish first you have to first finish


#7

cars4life
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Posted 12 September 2012 - 01:51 PM

Agree with 325i. Petrol cars depreciate like stink these days. They lose out as soon as they are driven out of the showroom. Infact the resale values of used petrol cars have sank and make a good proposition for those who want to buy a good used petrol car. But overall diesel works these days even if you dont drive that much daily

#8

CarCrazyASTL
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Posted 12 September 2012 - 03:18 PM

I'm amazed to hear that petrol vehicle needs more twice servicing than that of diesel!
My experience is completely inverse! & Please explain the term "Overall landed cost"

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#9

Hersch
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Posted 12 September 2012 - 09:16 PM

Ola Amigos!

First of all, many thanks for appreciating the effort. It is very heart-warming to see that you all liked the post.

There is no doubt that a diesel car would get you a better resale in today's scenario. But go around 6-7 years back, things used to be absolutely opposite than what they are today. Diesel cars can today fetch a good resale primarily because of the cost of fuel being low.

But what needs to be kept in mind is that at some point in time in the near future, the price of diesel fuel would also get deregulated just like petrol. Even if not completely deregulated, they would surely see some major increment. In such a scenario, we would need to ask ourselves if a diesel car would be more beneficial compared to a petrol. To speculate an answer is something really hard at this juncture but there would certainly be a shift in customer preferences as and when such a thing happens.

Another aspect to notice is that diesel technology has really advanced over the last couple of years and the advent of common rail and turbo charging technology has really answered the big question marks on diesel performance to a very large extent. If things go this way, the day is not far away when diesels would also deliver a similar refinement (sans any clatter) as that of petrol.

Same is the case with petrol, where companies like Ford are planning to bring in smaller capacity turbo-charged petrol engines having performance characteristics of a larger engine but the fuel sipping habits of a smaller displacement engine. A prime example is that of the award winning Ford ECO-Boost engine planned for the Ecosport scheduled to be launched later this year or early next year.

In the end, we the customers have all the reasons to rejoice. :D

@CarCrazyASTL: The total landed cost would be the cost of the car + the total interest paid (in case of a car loan). Since almost 80% of the cars sold in India (or maybe even over 80%) are financed, it is prudent to not only look at the On Road Price but the overall outgo from the pocket.

As for now, I feel that both Petrol and Diesel would offer good value depending upon personal taste and preference. For customers who do not wish to shell out more from the pocket initially (less capex), a petrol would make more sense. For customers who are willing to shell out more initially but pay less subsequently on a monthly basis, a diesel would be just right. There are some really good options for both fuel types available in the market to cater to everyone's taste.

So best is to test drive and see which one tickles your senses more... Happy and Safe Driving!
The Taurean Currently Rides: Toyota Corolla Altis GL | Hyundai Santro Xing XL | Maruti Suzuki Swift VDi | Hero Honda CBZ (Original 2001 Model) | and the saga shall continue…

History Sheet: Toyota Innova 2.5 V (07-10) | Honda City 1.5 Exi (01-11) | Honda Accord (06-09) | Yamaha YZF R15 ver 1 (09-13) | Maruti Zen (96-01) | Maruti 800 (87-92 & 92-96) | Ambassador (Two White beauties from the day I was born till 91)

#10

goenkakushal
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Posted 13 September 2012 - 10:03 PM

Lets not forget the higher resale price of a diesel..
Also cost of maintenane is not double for a diesel

#11

Hersch
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Posted 14 September 2012 - 12:41 AM

View Postgoenkakushal, on 13 September 2012 - 10:03 PM, said:

Lets not forget the higher resale price of a diesel..
Also cost of maintenane is not double for a diesel

Diesel prices increased by Rs. 5/ ltr across the country. This was exactly the point I was trying to make. Diesel would certainly loose its sheen if the prices get deregulated. It would also skew the prices of diesel cars in the resale market. Moreover, we do not buy our cars for the purpose of selling but for using it.

Also, if you look carefully at the calculation above, you would notice that while a Diesel car would cost more to service, the service interval is comparatively longer as compared to a petrol. Hence, there is a differential but not to a very large extent.
The Taurean Currently Rides: Toyota Corolla Altis GL | Hyundai Santro Xing XL | Maruti Suzuki Swift VDi | Hero Honda CBZ (Original 2001 Model) | and the saga shall continue…

History Sheet: Toyota Innova 2.5 V (07-10) | Honda City 1.5 Exi (01-11) | Honda Accord (06-09) | Yamaha YZF R15 ver 1 (09-13) | Maruti Zen (96-01) | Maruti 800 (87-92 & 92-96) | Ambassador (Two White beauties from the day I was born till 91)

#12

Hersch
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Posted 14 September 2012 - 12:50 AM

View PostHersch, on 11 September 2012 - 08:41 PM, said:

Overall cost of ownership of a Diesel Car
Overall Cost = Landed Cost of the Vehicle + Overall Fuel Costs + Overall Service Costs + Overall Repair Costs
=> Overall Costs = 16,00,000 + {Rs.41/ ltr  x (1000kms per month/ 16kms per litre) x 12 months x 7 years) + (9 services x Rs 10,000 cost per service) + 1,50,000
=> Overall Costs = 16,00,000 + 2,15,250 + 90,000 + 1,50,000
=> Overall Costs = 20,55,250/-

The above calculation stands revised due to increase in the prices of Diesel by Rs.5/ ltr. The revised calculation is as follows:
Overall Cost = Landed Cost of the Vehicle + Overall Fuel Costs + Overall Service Costs + Overall Repair Costs
=> Overall Costs = 16,00,000 + {Rs.47/ ltr  x (1000kms per month/ 16kms per litre) x 12 months x 7 years) + (9 services x Rs 10,000 cost per service) + 1,50,000
=> Overall Costs = 16,00,000 + 2,46,750 + 90,000 + 1,50,000
=> Overall Costs = 20,86,750/-

A difference of almost Rs.87,000/-.

Diesel car becomes a pointless option for people having a monthly running of less than 1100 kms i.e. a daily running of less than ~37 kms.
The Taurean Currently Rides: Toyota Corolla Altis GL | Hyundai Santro Xing XL | Maruti Suzuki Swift VDi | Hero Honda CBZ (Original 2001 Model) | and the saga shall continue…

History Sheet: Toyota Innova 2.5 V (07-10) | Honda City 1.5 Exi (01-11) | Honda Accord (06-09) | Yamaha YZF R15 ver 1 (09-13) | Maruti Zen (96-01) | Maruti 800 (87-92 & 92-96) | Ambassador (Two White beauties from the day I was born till 91)

#13

evo X
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Posted 16 September 2012 - 08:00 PM

Service cost of diesel 10000 per 10000 km
Nd service cost of petrol 5000 per 5000km
So if u calculate the service cost for 10000km of petrol car it cost 10000 (5000x2)
so it cost exactly the same..

#14

evo X
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Posted 16 September 2012 - 08:03 PM

Service cost of diesel 10000 per 10000 km
Nd service cost of petrol 5000 per 5000km
So if u calculate the service cost for 10000km of petrol car it cost 10000 (5000x2)
so it cost exactly the same..

#15

Hersch
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Posted 19 September 2012 - 07:18 PM

Absolutely correct! However, its the service intervals/ number of services required over 7 years which makes that slight difference in the cost.
The Taurean Currently Rides: Toyota Corolla Altis GL | Hyundai Santro Xing XL | Maruti Suzuki Swift VDi | Hero Honda CBZ (Original 2001 Model) | and the saga shall continue…

History Sheet: Toyota Innova 2.5 V (07-10) | Honda City 1.5 Exi (01-11) | Honda Accord (06-09) | Yamaha YZF R15 ver 1 (09-13) | Maruti Zen (96-01) | Maruti 800 (87-92 & 92-96) | Ambassador (Two White beauties from the day I was born till 91)

#16

driftpunk
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Posted 25 September 2012 - 12:46 AM

What a good write-up. Covering most of the factors! Keep it up.
As the diesel prices in India have gone up by 5 bucks, last week, the calculations have changed and have showed the differences. The diesel prices will go up by Rs.2.20 in the coming months when the heat subsides. Its not in the hands of the government. They are helpless to a great extent. India imports more than 80% of oil and due to the uneasy tension in the gulf there are taxes levied there itself. Here in Canada, the prices varies everyday. In India too, let the prices become stable and maybe, deregulated, and then the up and down will become an everyday affair which people will stop looking into nor make a fuss about it,
-- A developed nation does not have the poor travelling by cars, but the rich using public transport... --

#17

Hersch
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Posted 25 September 2012 - 06:02 PM

@ driftpunk: Thanks for appreciating the work! You are absolutely right as India cannot afford to subsidise fuels in current global conditions. We have an ever growing fiscal deficit and the fuel subsidies only add a major chunk to the same. However, our governament needs to put steps into place to ensure that public transport gets some sort of subsidy to keep the tariffs in reach of the common man. This would also promote usage by prompting a large chunk of population to move to public medium of transport instead of using personal cars. Our transport policy should also encourage and incentivise manufacturers to develop alternate fuel and hybrid models.
The Taurean Currently Rides: Toyota Corolla Altis GL | Hyundai Santro Xing XL | Maruti Suzuki Swift VDi | Hero Honda CBZ (Original 2001 Model) | and the saga shall continue…

History Sheet: Toyota Innova 2.5 V (07-10) | Honda City 1.5 Exi (01-11) | Honda Accord (06-09) | Yamaha YZF R15 ver 1 (09-13) | Maruti Zen (96-01) | Maruti 800 (87-92 & 92-96) | Ambassador (Two White beauties from the day I was born till 91)

#18

frankmehta
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Posted 28 September 2012 - 11:49 AM

I bought a used Honda Civic AT and converted it to CNG (Lovato Sequential Kit) last week. Gives me a range of 150 km for 300 rupees of CNG. For a car of it's girth, and an automatic at that, alongwith a 1.8 litre engine that is not known to be very efficient, this makes for the perfect city car. The aircon is the best I have ever experienced, the car looks a million bucks and also drives extremely well. Full paisa vasool. I'm a proponent of the CNG bandwagon since it's cheap, doesn't pollute the atmosphere and is available freely around where I live.
Petrolhead by heart. Pedodontist by profession.

#19

neerajd
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Posted 28 September 2012 - 01:20 PM

@evoX and Hersch: I really do not think a petrol car costing 8.5 lacs takes Rs 5000 of servicing every 5000 kms!! Isn't that on the higher side?
A petrol car is due for servicing every 10,000 kms or one year whichever comes first. And typically, the service costs won't be more than 7-8k.. So in actuality, the calculation for overall ownership cost of the vehicle will go down from the 20.20 lacs you have calculated above.
Also, diesels also have a service interval of 10-15k kms. But I agree that the service costs will be much more than petrols.

Hersch: you have mentioned that a petrol cars' repair costs will be 75k while that of the diesel will be 1.5 lacs.. I feel thats a little far from reality. In 7 yrs, a car will typically have its suspension changed which itself costs around 30-50k. Other maintenance costs will also include a tire change. So the effective costs of ownership will go up considerably is what I feel...

But you have done a great job here to sum up all the calculations a prospective buyer should be looking at when buying a new car. All the figures may vary considering the segment they would be looking at. But these calculations do show a fair picture to compare a Diesel Vs Petrol.

I am also considering a new car and my decision leans towards a diesel. My daily run is ~50 kms + ~100 kms on weekends. But, considering I will keep my current car, this running will be divided.
Neeraj

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