Do you really need that diesel car?

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It’s essential you make the right decision about which type of fuel suits your motoring needs best. (Reuters) It’s essential you make the right decision about which type of fuel suits your motoring needs best. (Reuters)
SummaryIt’s essential you make the right decision about which type of fuel suits your motoring needs best.

Or are you better off with a cheaper-to-buy petrol car? Especially after this week’s decision when the government allowed oil marketing companies to progressively raise diesel prices

When buying a new car, it’s essential you make the right decision about which type of fuel suits your motoring needs best. Looking at the ever increasing petrol prices, the market sentiment is that diesel cars are the need of the hour. Diesel-powered cars have slowly become the default choice for Indian car buyers, but is a diesel really worth the price difference over a petrol model? Please do not discount the fact that, this week, the government allowed oil marketing companies to progressively raise diesel prices.

The fact remains that diesel engines have clearly advanced over the last decade, making them more appealing. While we have seen an increase in the market share of diesel cars, petrol cars today are fighting back. We all know diesel is cheaper at the pump compared to petrol, and it also offers better fuel economy, but tallying up the numbers can reveal startling facts.

The true value of a diesel over petrol isn’t as black and white as you may think. Read on to understand how to resolve your diesel or petrol dilemma.

The math

Let’s take the Maruti Suzuki Swift as an example. There’s a considerable price difference between the petrol and diesel variants of the Swift. The top-spec ZXi petrol variant is priced at R6.29 lakh while the ZDi retails at R7.78 lakh (prices, on-road Mumbai). The difference here is R1.49 lakh and with an annual average running of 10,000 km, or around 850 km every month, you save a little more than R22,000 a year. With these figures, it would require you to travel more than 66,000 km for you to reach the break-even mark in six years and six months. However, this is an extreme case and there are models with a lower price difference between their respective petrol and diesel variants.

Your buying decision should also consider parameters like service cost, EMIs (in case of car finance) and, ultimately, the resale value. The diesel model will incur higher servicing bills, thanks to costlier spare parts.

In terms of EMIs, the R1.49 lakh premium paid for a diesel Swift will increase your monthly instalments by R4,896, at the rate of R3,264 per R1 lakh for a three-year loan tenure.

This will almost negate your savings on the cheaper diesel fuel.

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