Do you really need a diesel?

When buying a new car, it’s essential you make the right decision about which type of fuel suits your motoring needs best. 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? This is a question all new car buyers must answer if they are to benefit from the running cost benefits of a diesel. 

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 Rs 6.29 lakh while the ZDi retails at Rs 7.78 lakh (prices, on-road Mumbai). The difference here is Rs 1.49 lakh and with an annual average running of 10,000km, or around 850km every month, you save a little more than
Rs 22,300 a year. With these figures, it would require you to travel around 66,500km 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 Rs 1.49 lakh premium paid for a diesel Swift will increase your monthly installments by Rs 4,896, at the rate of Rs 3,264 per Rs 1 lakh for a three-year loan tenure. This will almost negate your savings on the cheaper diesel fuel. But the diesel does have an ace up its sleeve – the resale value. Depending on the condition of your vehicle, a diesel model will fetch you more in the used car market compared to a petrol-powered car.

Fuel prices – the changing scenario