confused on buyng a petrol or diesel car

You will have to change it at similiar intervals, but remember, some components like brake pads etc need much frequent replacements. A diesel car is heavier than the petrol, and engine braking is less effective in a diesel engine, and brake pads can wear out at a faster rate. Also, maintenance costs are directly dependent upon driving habits, and other conditions like fuel etc. Main areas of concern are Clutch, Injectors, Turbocharger which are expensive to fix in a diesel. If you take good care, then maintenance will be less itself.

When i was planning to buy a car, I was struck between choosing petrol or diesel. I did a calculation myself. 

    1) If I opt for diesel, and if you opt for car loan (with base payment remaining fixed), my car loan amount would increase by 1Lakh for a diesel car. If you apply a rate of interest of 11.5% for a 5 year car loan, the EMI increases by approx Rs 2600 (This is approx number, obviously it will be much higher) for that additional Rs 1Lakh. That means u will pay an additional Rs 2600 for 60 months. Assuming - diesel car gives 15kmpl in city (with AC), petrol give 12 kmpl in city (with AC), Diesel cost = Rs 44 per lite, Petrol = Rs 70 Per litre, total run for a month = 1250 KM (15000 KM per year). The running cost for a diesel car comes to Rs 3700 and for a petrol car Rs 7300. So with diesel car you spend 3700 + 2600 = 6300 every month and with petrol car you spend Rs 7300. So you save Rs 1000 every month with diesel car.

    2) However I missed to mention that you spend Rs 2600 additional as EMI on disel car while you save Rs 1000 with the same. That means Rs 1600 (2600 - 1000) is something you invest extra for diesel car every month. Lets assume, that you opted for petrol car and run the same number of KM as explained above. Thereby lets say i put this amount (Rs 1600) as recurring fixed deposit for 5 yrs with simple interest of 7%. At the 5th year u might get Rs 96000 (Rs 1600 * 6) and Rs 16000 (approx interest u obtain for 5 yrs. Not an accurate number) as interest (which is tax exempted). Thus ur saving bcos of recurring deposit at the end of 5th yr with petrol car is 96000 + 16000 = Rs 112000 which is Rs 1800 per month.

    3) Thus if u consider points 1 and 2, you save Rs 1800 per month with a petrol car. Let me add Rs 10000 as additional maintenance cost for 5 yrs when u own a diesel car and Rs 5000 more for 5 yrs of insurance with diesel car. At the end of 5 yrs, your savings with petrol car comes to Rs 123000 (1800 * 60 + 10000 + 5000).

    4) If you sell your car at the end of 5th yr, a diesel car might fetch Rs 50000 more (gracious assumption by the way) than a petrol. You will still see that u save more with a petrol car.

    5) If you perform the above calculation, with a car loan tenure of 5 yrs but u end up keeping the car for 6 yrs, u will see a diesel car brings u more savings than petrol. This means u breakeven and start earning profit with a diesel car if u keep it for 6 yrs or so. assuming that you increase the base payment amount by Rs 1 Lk when u opt for a diesel, u will see that Diesel car will easily bring lot of savings. Assuming you are not going to car loan at all and making complete investment from your pocket, u will see that diesel easily saves lot of money.

So in essence, what really boils down is that car loan. That additional Rs 1Lakk car loan for a deisel car plays a crucial role in determining ur profit at the end of 5th yr.

Of course I might have missed lot of factors.

A similar calculation assuming u r going to keep the car only for 3 yrs would give u different results.

So when I bought a car, i naturally had to go for a car loan and had decided that i will keep the car for 5 yrs. I kind of knew that i will not end up driving 15K KM per year. My calculation favored me to chose a petrol car. In a way after more than 1.5 yrs of buying the car, I think i made a fair decision. My car has run only 9000 KM in last 18 months.

If you see my above post, and perform the below calculation. Lets say you bought a diesel car by investing all the money from your pocket.

1) Assuming - diesel car gives 15kmpl in city (with AC), petrol give 12 kmpl in city (with AC), Diesel cost = Rs 44 per lite, Petrol = Rs 70 Per litre, total run for a month = 600 KM (7200 KM per year). The running cost for a diesel car comes to Rs 1760 and for a petrol car Rs 3500. So with diesel car you spend 1760 every month and with petrol car you spend Rs 3500. So you save Rs 1740 every month with diesel car.

2) However I missed to mention that you spent Rs 100000 more on diesel car. Lets assume, that you opted for petrol car and run the same number of KM as explained above. Thereby lets say i put this amount Rs 100000 as fixed deposit for 5 yrs with simple interest of 7%. At the 5th year u will get Rs 100000 as principal and Rs 35000 (approx interest u obtain for 5 yrs. Not an accurate number) as interest (which is tax exempted). Thus ur saving bcos of recurring deposit at the end of 5th yr with petrol car is 100000 + 35000 = Rs 135000 which is Rs 2250 per month.

3) Thus if u consider points 1 and 2, you save Rs 2250 - 1760 = 490 per month with a petrol car. Let me add Rs 10,000 as additional maintenance cost for 5 yrs when u own a diesel car and Rs 5000 more for 5 yrs of insurance for diesel car. At the end of 5 yrs, your savings with petrol car comes to Rs 150000 (135000 + 10000 + 5000).

4) If you sell your car at the end of 5th yr, a diesel car might fetch Rs 50000 more (gracious assumption by the way) than a petrol. You will still see that u save more with a petrol car.

Its a different calculation and as you keep increasing the number of kilometers per year, you will see the diesel car will bring you profit. So make that careful calculation and u should know what fits u better.

We have reiterated in other posts also that if your running is > 1000km per month. a diesel vehicle with good FE would always give you better IRR and NPV.

As per my above calculation even if you run only 600 KM per month, IRR for diesel is marginally better than petrol.

The fact that makes the big difference is MONEY. Are you going to borrow the money from bank or invest from your own pocket?

If you borrow lots of cash from bank and pay high EMI, even if run 1500 KM or more per month, petrol car will give u better IRR.

The lesser u borrow from the bank, IRR starts moving towards a diesel car

If the petrol prices go up again, 600 Km might become 400 Km tomorrow.

However, we need to also look at the following aspects:

1. Eveyone takes diesel maintenance cost marginally higher than petrol. This is true under normal cricumstances when nothing goes wrong and only routine maintenance (oil change, filter change etc) are involved. The moment some part fails, you will feel the pinch. Many of the parts in diesel engines are around two times expensive compared to petrol. And some parts (I dont rememeber which ones, I think fuel injector or something) in diesel engine is almost 7-8 times expensive. Also, being a heavier engine, the wear and tear of some parts is faster in diesel cars (tyres, shock absorbers, clutch, brakes etc) which noone seems to consider in the calculations.

2. Some go for petrol, even with the knowledge of the savings in diesel, since they prefer the smooth ride of petrol cars. All said and done about modern diesel engines, we can still feel the difference very well when we drive the car. Some dont mind paying a little more for that comfort.

3. People argue about better resale value for diesel cars. But I think it is sometimes the other way round, especially when the car is more than 5 year old or so. Very few dare to touch an old diesel car since they dont know about the condition of the car and are very well aware of the price they have to pay if some part fails. With petrol cars, we can take chances since the repair costs are much lower.

Tomy

Thanks & my regards to all carwale members who 've given advcies on the issues raised by me in the last fortnight.

I 've decided to go for Honda Brio EMT, Which is 40k cheaper than its immediate higher variant SMT. Now my question is shud I go for SMT  to get rear power window, music system, body color door handle , body color outside rear view mirror & keyless entry or i shall make it by the dealer in the EMT. Is it at all necessary to make it by the dealer,  can i make it by the outside market? Which one should be best from the cost & qualitiative point of view. kindly advise.

It depends on which all features you need. If you need all the features mentioned, go ahead with SMT. If only keyless entry and music system are required, 40K is too high for that.

Regarding rear power windows, decide if you need them. Some cars like Figo do not have rear power window even in the top model. Some dont find it very useful, but some like to secure the window (and lock it) from driver seat, especially when kids are sitting behind and they dont want the kids to manually open it and put their hands and heads outside.

There is nothing wrong in fitting accessories outside, as long as they use the proper connectors without cutting any cables. However, confirm with Honda if there will be any issues with warranty (they will definitely try to discourage you). Maybe you can fit the keyless entry from Honda and music system from outside if you want any specific brand.

Tomy

Dipak... my personal opinion is go for high end.

You can fit in keyless entry and the rest outside the dealer or with the dealer.... no doubt it will be cheaper. but if u hv any problem u hv reach out that dealer or outside seller to fix them.

If it is factory fitted, if i am not wrong, u regular car warranty covers it.

Go with high end Brio!!! Happy riding!!!