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Petrol cars cheaper up to 5 years
Sumant Banerji, Hindustan Times
New Delhi, May 21, 2013
First Published: 22:59 IST(21/5/2013)
Last Updated: 11:15 IST(22/5/2013)

Are you planning to buy a diesel car because the fuel is cheaper than petrol? Read this report very carefully before you decide.

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The conventional wisdom is that diesel cars are cheaper in the long run. That statement, however, is only partially true. The overall lifecycle cost (purchase price + running cost + maintenance) of your car depends on how much, on average, you drive everyday and for how long you intend to retain your car.

If, for example, you drive less than 60 km a day and plan to sell your car after, say, four years, then you may be better off buying a petrol car. For the purpose of this report, we have considered the petrol and diesel variants of Maruti’s popular hatchback Swift. But the logic holds for other cars as well. http://www.hindustantimes.com/Images/Popup/2013/5/22_05_13-biz-21b.jpg

A comparison between the respective running costs of the two cars suggest that for somebody who travels over 60 km a day, as many do in big cities, diesel still makes more sense. However, it does not quite hold true in small tier II and III towns where the distances as also the affordability of cars are relatively less.

Typically, a diesel car is 20% more fuel efficient than a petrol car. Then, diesel is also cheaper than petrol. At current prices in Delhi, this means, the diesel Swift gives you a saving of Rs. 1.21 per km compared to the petrol version. You will need to drive over 100,000 km before you recover the additional cost (of about Rs. 1.3 lakh) that you paid for the diesel car.

If you drive 60 km a day, the lifecycle cost of your diesel car equal that of a comparable petrol model in five years. If you drive less, say, 40 km a day on an average, the breakeven time will balloon to seven and a half years.

Some other factors, like cost of maintenance that tends to be higher for diesel cars also load the dice in favour of petrol cars.

“Diesel cars still require more maintenance after a few years and further, the overall refinement of a diesel model is poorer than its petrol counterparts. This also adds to the overall driver and passenger fatigue,” said Umang Kumar, co-founder and CEO at Gaadi.com, online portal that deals in cars.

“All these factors, combined with the over Rs. 7 fall in petrol prices over the last two months, will surely contribute to making a petrol cars much better to own over a prolonged period of time,” he added.

And buyers are beginning to realise this. “There are some early signs of improvement in demand for petrol cars,” said Rakesh Srivastava, senior vice-president, Hyundai Motor India.


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