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Saturday, March 20, 2010

WHATCAR? UK: Petrol or diesel - which is cheaper?

Petrol or diesel - which is cheaper? - Introduction

19 March 2010 
Diesel or petrol?
Choosing which fuel is right for you isn’t just about economy. There are other costs and your driving style to consider. Our experts explain

It’s one of the eternal dilemmas for car buyers: do I go for a petrol-powered car or a diesel one? People often make wrong assumptions about the differences between the two, namely that diesel drivers save a packet at the pump, but petrol drivers have more fun. This isn’t necessarily the case, and your ideal car choice depends on your individual circumstances and preferences.

For instance, you might find you prefer the way a diesel delivers its performance, and while a petrol car might have worse fuel economy than its diesel equivalent, it might actually still end up being cheaper to own over three years.

Whatever you do, don’t just look at the fuel economy figures. Depreciation is the biggest cost in car ownership, so resale values play a vital role in deciding whether a petrol or diesel car will be more cost effective overall. Add to this the facts that diesel-powered cars tend to be more expensive to buy and service than their petrol counterparts but can attract lower road tax and insurance charges, and you have some maths to do.

For example, the diesel Fiat 500 does nearly 14mpg more than the 1.2 petrol, but it costs a massive £2400 more to buy, which means that, using economy figures alone, it would have to cover 133,164 miles before the better economy compensates for the higher price. The diesel’s lower servicing costs narrow the gap, but the petrol still works out £981 cheaper to own over three years/36,000 miles, or £327 cheaper per year.

Going for the diesel version of the Mazda 6 is a no-brainer, however. Even though the 2.2D 163 costs £1100 more than its petrol equivalent, it starts to repay you at the pump after 40,279 miles. Its lower depreciation and road tax figures also mean that the diesel version is £1191 cheaper than the petrol over three years.

Similarly the Peugeot 3008 and Volkswagen Golf diesels are both cheaper over a three-year period than the petrol versions, by £705 and £442, but the BMW 3 Series throws up a bit of a surprise. At three years, the £2100 premium for the 320d diesel over the 320i petrol still isn’t recovered through fuel savings or higher resale values, while road tax is the same and the diesel’s insurance and servicing are more expensive. Overall, the 320i beats the 320d by £709 over a three-year period.

Generally speaking, though, the bigger the car you’re considering, the smaller the premium charged for the diesel, and the more miles you cover, the more likely it is that a diesel will save you money.

To help you calculate which car works out cheapest for you, we’ve posted a tool online at Simply type ‘petrol or diesel’ into the search box. You can even vary your mileage to see how it affects the decision.

Why do diesel cars and fuel cost more?

A diesel engine needs to be stronger than a petrol because the fuel explodes under greater pressure, so it is built with more metal for extra sturdiness. The heavier engine then needs stronger mounts and heavier-duty suspension. The clutch and gearbox are often uprated to cope with the added torque and there’s usually more sound-deadening material. All of this adds to the price of building the car.

One of the most significant costs for the future of diesel cars is the expensive exhaust systems they’ll need to meet upcoming emissions legislation.

The diesel itself
Diesel is closer, chemically, to crude oil, so you’d think the refining process would be simpler than the process that generates petrol. In fact it’s more complicated, and expensive, because sulphur levels need to be cut from it. Demand for diesel from other sectors, including shipping and for heating homes, also pushes up pump prices.

The future
So what about future fuel prices? Nick Vandervell from the UK Petroleum Industry Association says: ‘It depends on what the political policies are – there is talk of whether we should tax fuels on their energy content, which would make diesel slightly more expensive than it already is.’



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