When it comes to big value asset purchase like a car, we generally think of many factors like Brand, Mileage, Service center availability, Auto/Manual gear shift, and Petro or Diesel variant etc.
Of course, buying a car is a big financial decision for most of the families, that should run for longer without much of maintenance problems or repairs. While many factors are related to comfort which varies from person to person.
Main Financial difference will come only in choosing one from either Petrol or Diesel version. It is always better to take a calculative decision whenever the only cost is involved apart from other feelings or luxury values.
Diesel variant cars come with a Higher cost. How much is that?
- Purchase Cost Difference: Buying cost difference between diesel and petrol cars is approx. 1 to 1.25Lacs depends on the variant, for a few high-end models cost may be even higher. Also, there may be an additional cost of govt. tax for diesel cars compared to petrol.
- Cost of money: If you are taking a loan to fund your car, then interest cost of that extra amount will add to your budget.
- If you are taking a loan at 10% interest, your additional cost for 1.25Lacs with 5-year term will be around Rs. 35,000/-( Interest on a reducing balance method after EMI)
- If you are taking the car with your own cash: Loss of interest needs to be calculated. if you invest in safe FDs at 7.5%, will be around Rs. 50,000/-(Compound interest)
- Repair & Maintenance cost: Diesel engine cars will have high maintenance cost due to few technical difference like the clutch plate, cleaning of EGR and high volume of oil to replace in servicing etc and few Spare parts will come at a high cost as compared to petrol cars.
- Considering the duration of car usage as 7 years, cost difference for the entire period may be around Rs. 25,000/-
- Higher Insurance cost: since the cost of the car which is to be covered under insurance is high for a diesel car, insurance premiums will be higher as compared to petrol cars.
- The difference is insurance premiums costs may be around Rs. 20,000/- for 7 years period.
- Concern on pollution: usage of diesel cars will impact the environment, and increase pollution. Govt. and the supreme court is against using diesel cars.
You may like to read How to earn Rs. 1 Cr by investing just Rs. 1300 Per Month?
Total extra cost for diesel car as compared to Petrol cars
|Extra Purchase cost||Rs. 1 to 1.25 Lacs|
|Cost of money- Financing||Rs. 35,000|
|Repair & maintenance cost||Rs. 25,000|
|Insurance cost||Rs. 20,000|
|Total additional for diesel car||Apprx: 1.8 to 2 Lacs|
Advantages of Diesel cars Vs. Petrol cars
- Cost of Fuel- There are 2 advantages on the cost of Fuel
- Diesel Car gives extra mileage as compared to Petrol car
- Price of Diesel is less Vs Petrol
Under Normal road driving conditions- Summary of Savings in Fuel cost for Diesel car
|Item||Diesel car||Petrol car|
|Mileage||19 kmpl||14 kmpl|
|Fuel price on 24 Feb 2019||Rs. 70/Ltr||Rs. 74/Ltr|
|Cost per km||3.68 Rs||5.28 Rs|
|Savings in Fuel cost for Diesel car w. r. t Petrol car||Around 1.6 Rs per km|
considering savings of 1.6 Rs per km in a diesel car, to reach savings of Rs. 1.8 to 2 Lacs of extra investment made.
- The breakeven point will be at around 1.2Lac kms.
- You will recover cost only after driving 1.2Lac Kms.
- Considering life at 7 years, around 17,000 km/year and around 1500km per month.
As you can see from the above details.
- You should consider going with Diesel car if you use the car frequently for long distances above 2000km per month for the next 7 years.
- If you wish to experience the fun drive of having high torque vehicle with powerful driving, you can consider diesel vs Petrol
- Remember if you will be able to recover your cost only after driving 1.2 Lac kms
- Diesel cars will produce more vibration, and Noise as compared to petrol cars.
- With the usage of a Diesel car, you will be polluting the environment more compared to petrol
- If your monthly usage is less than 1500km, Petrol variant will be cost effective.
If you like this article, please share with your friends
Sharing is caring 🙂