Does Buying Diesel Car Over Petrol Gives Financial Edge?

[dr_sachin]

well,what i understood from shailinder's point is that we have to spend the money,be it on fuel or something else,but definitely we are not SAVING(making interest out of it).its a smart thought,but i guess,if we put 2000 in fuel(diesel) and spend 2000 on weekend,it wiil be equal to a nice saving.
btw i am a honda fan so i bought honda city....... twice.(despite all this diesel/petrol calculations clearly in favour of diesel now).

 

[dharmesh]

The point shailinder is trying to make is how to see the saved money. In my personal opinion you can't. It is same as daily you travel by taxi and you spend rs.100 and after some time you start travelling by govt. Bus and spend only Rs.30 per day. But here also you dont save any thing unless you make an effort to put the Rs.70 you saved daily aside and see at the month end how much you saved. We just spend less, dont save. :-)

There is one famous joke, that everyone might be aware of here.

Husband: Today I saved Rs.10.
Wife: How?
Husband: I came running behind bus all the way to home.
Wife: Stupid, You could have save Rs.50, if you had run behind Taxi and come home.


I hope you got the point.

 

[chayan]

One thing that we overlook in the Petrol vs. Diesel saving calculation is that a Diesel car will fetch a higher resale value than the Petrol version of the same car (when 2-4 year old).

This balances out the premium (Rs. 1 lakh or more) that you pay as difference when you buy the diesel car over the petrol one.

 

[shailinder]

One thing that we overlook in the Petrol vs. Diesel saving calculation is that a Diesel car will fetch a higher resale value than the Petrol version of the same car (when 2-4 year old).

This balances out the premium (Rs. 1 lakh or more) that you pay as difference when you buy the diesel car over the petrol one.

You are right but again you are paying premium to buy that diesel car aren't you.

For example:

Swift petrol on road price is 5* lakhs (LXi)
Swift diesel on road price is 6* lakhs (Ldi)

* Assuming difference is 1 lakh rupees.

How much do you think, you would get after 2-3 years for both the cars ? It will be higher than the petrol sibiling but would it justify the premium you had paid earlier.

 

[S Class]

One thing that we overlook in the Petrol vs. Diesel saving calculation is that a Diesel car will fetch a higher resale value than the Petrol version of the same car (when 2-4 year old).

This balances out the premium (Rs. 1 lakh or more) that you pay as difference when you buy the diesel car over the petrol one.

The resale will be indeed more for diesel but then running also matters. If diesel has done 95k+ in 3 yrs & petrol only 30k, then calculations may vary. But heck, the diesel guy has already saved lot of money in fuel !!

If running is more & replacement will be in or under 4 yrs, diesel is better opt. Those who want to keep for 5+ yr, then will have to check.

 

[Superbad]

The point shailinder is trying to make is how to see the saved money. In my personal opinion you can't. It is same as daily you travel by taxi and you spend rs.100 and after some time you start travelling by govt. Bus and spend only Rs.30 per day. But here also you dont save any thing unless you make an effort to put the Rs.70 you saved daily aside and see at the month end how much you saved. We just spend less, dont save. :-)

There is one famous joke, that everyone might be aware of here.

Husband: Today I saved Rs.10.
Wife: How?
Husband: I came running behind bus all the way to home.
Wife: Stupid, You could have save Rs.50, if you had run behind Taxi and come home.


I hope you got the point.

saving will be apparent if you pay by card

say you get your salary by etransfer to your debit card and you then use your debit card for your fuel bills. the amount you save will be there in your salary account and by 6 months/3 months you get 3-6 % p.a interest on it.

hope i am clear on this.

 

[shailinder]

The point shailinder is trying to make is how to see the saved money. In my personal opinion you can't. It is same as daily you travel by taxi and you spend rs.100 and after some time you start travelling by govt. Bus and spend only Rs.30 per day. But here also you dont save any thing unless you make an effort to put the Rs.70 you saved daily aside and see at the month end how much you saved. We just spend less, dont save. :-)

There is one famous joke, that everyone might be aware of here.

Husband: Today I saved Rs.10.
Wife: How?
Husband: I came running behind bus all the way to home.
Wife: Stupid, You could have save Rs.50, if you had run behind Taxi and come home.

I hope you got the point.

ha ha ha

Awesome joke of the day. Great one Dharmesh.

saving will be apparent if you pay by card

say you get your salary by etransfer to your debit card and you then use your debit card for your fuel bills. the amount you save will be there in your salary account and by 6 months/3 months you get 3-6 % p.a interest on it.

hope i am clear on this.

+1 to Superbad. Yes you have made your point clear to me at least.

 

[vaibhav]

Just wondered my maruti 800 even after 16 years is doing well.

Will diesel dezire also last 15-16 years . I drive within 100 km /per hr

 

[chayan]

You are right but again you are paying premium to buy that diesel car aren't you.

For example:

Swift petrol on road price is 5* lakhs (LXi)
Swift diesel on road price is 6* lakhs (Ldi)

* Assuming difference is 1 lakh rupees.

How much do you think, you would get after 2-3 years for both the cars ? It will be higher than the petrol sibiling but would it justify the premium you had paid earlier.

Yes, you should get the 1 lakh premium if you sell the car within 2-3 years and have lesser mileage (i.e not insane amounts). Check out the prices on the web portals.
I actually was interested in buying a diesel (2-3 years) old as a second car but could not get one that suited my requirements. The ones with lower mileage were too costly and those that were not either were dealers (where kms were questionable). Also the general idea is that people sell of diesel after 3-4 years as the real maintenance costs starts after that. I know this because my uncle buys his cars under his business name and sells off once 3-4 years are done (maintenance as well as depreciation benefits).

Anyway after much thought decided to get a pre-owned Honda Jazz. Paid a little premium as it was during the latter phase of the shortage crisis Honda was going through, but thought it a better buy because of the brand name, petrol engine and general reliability.

 

[shailinder]

Yes, premium on diesel from Maruti stable would be higher as compare to any other manufacturer in India. It be more to do with the brand (MS) and nothing much I guess.

 

[vaibhav]

FinMin examining raising excise duty on diesel cars: CBEC Chairman S K Goel - The Economic Times

 

[S Class]

FinMin examining raising excise duty on diesel cars: CBEC Chairman S K Goel - The Economic Times

These are morons sitting in Delhi. Why not first stop free travel by Air India for MPs ? Why not sell of Air India ? Govt idiots can give 50,000+ Cr for bankrupt co. but put high taxes on car & fuel. When these rotten head Govt pigs go on foreign study tour, don't they see prices of cars & fuel even in high income west ? Maybe not as they must be busy in bars.

Infact, this week, air perks for MPs have gone up.

And why does some pig grade minister requires 30 cars in convoy ?

Sarkar mere baap ki,
Janta apne aap ki.

 

[vaibhav]

High-level meet to discuss tax on diesel cars - Home - livemint.com

 

[TSIVipul]

Well,guys here are my views:-

Does Buying Diesel Car Over Petrol Gives Financial Edge?
The answer is simple:NEVER..

Why?
Because I myself own a diesel car and my monthly expenses on fuel etc is really quite high.

If one own a petrol car then he'll be automatically more environment conscious...Its the petrol price effect,but if he owns a diesel car then even if he have to go to piss then also he will take the car.
I have seen many people here who owns some Swift etc etc and for even 200-300 meter trip they take the car and man the A/C thing,better less said:-
Those with petrol cars park their cars in shade but the diesel owners just mindlessly burn the oil and keep their A/C's running for whole time.

Result:All the works are being carried out at the same pace and the car is also nearly equally used,but the diesel owners at the end of the day end up paying about 80-90% of the same as the petrol owners pay.
Take it this way:
A person whose monthly running was 2000,he maintains it at either at 2000 or 1800 after buying a petrol car,but if he buys a diesel car then he mindlessly increase it upto 2500 or even 3000 kilometers.

Some days back I did a survey and in that too I found that most of the cars pulled back by the bank was 'DIESEL' ones..thanks to mindless owners.

How?
How it is possible that diesel cars don't give any financial edge?Take it this way:-

Case considered:-Mr.Shailinder(Imagined person,not ours) is a Delhi based common man who earns 50k per month and live with his family of four-He,wife and two children.

Mr Shailinder(I hope you have no problem for me using your name buddy) wants to buy a Swift for himself and he is confused between diesel and petrol.
Swift ZXi costs him 6.23 lacs on-road Delhi while swift ZDi costs him 7.72 lacs on-road Delhi.
Now Mr.Shailinder made a chart making out his financial planning,running costs etc etc.

Salary:50k.
Monthly running:2k+200 kms(2400 kms of weekend trips for whole year).
Fuel prices:
Petrol:About 73/liter.
Diesel:About 45/liter.(I took round average figures considering whole country prices).

Difference between variants:1.49 lacs or say 1.50 lacs.

If he buys a Swift petrol then his monthly fuel bill will be around 11471 @ 14 kpl FE.
If he buys a Swift diesel then his monthly fuel bill will be around 6187 @ 16 kpl FE,but for Diesel car he will do at least 500 kms more in the car per month which adds Rs 1406 + 500 rs fuel will be which he is going to waste by taking longer routes,keeping A/C continuously running etc.Hence he will be spending 8093 Rs per month on fuel.
I hope I am right guys.Please correct any mistake,I'll be thankful to you.

So now he plans the financial thing and finds it out as follows:-
3 lacs down payment and after that for ZXi he needs a loan of 3.23 lacs while for ZDi he needs a loan of 4.72 lacs.
Now bank charges him at Rs 2500 per lac per month for 5 years and hence his installments will become somewhere about:-
Rs 8075 per month for ZXi.And hence in five years he will end up paying Rs 4,84,500 for the loan.
Rs 11800 per month for ZDi.And hence in five years he will end up paying Rs 7,08,000 for the loan.

Hence at the end of five years ZXi costs him:7,84,500 and ZDi costs him 10,08,000.

Now his monthly expenses on the car becomes:-
11471+8075=Rs 19546 per month for ZXi and
8093+11800=Rs 19893 per month for ZDi.

Hence this way the diesel car is simply ruled out in terms of 'giving a financial edge' over the petrol one.

To be continued..

 

[TSIVipul]

So in case of same car,the diesel can give the financial advantage only if the running is really high,which is of very less people else maximum 1500-2500 kpm is the bar.


Case II:-When both the cars come at same price,then definitely diesel gives the advantage of about 2-3k per month but then you get a more premium petrol car as compared to the diesel one.

Rest there are many more factors but I ignored them considering their very low or negligible margin.