Civinfo - View Single Post - Engine Petrol or Diesel

Pottsy · 30th July 2007, 12:18

This question has come up a few times before - which is cheaper to own? The diesel costs £1240 more to buy. But it's not as simple as that...

Step 1: Depreciation.

The basic cost of owning the car is simply the amount you lose from buying to selling. The depreciation of a diesel is always less than it's identical petrol (because it is a more desirable option to both the used buyer), but how much less? Looking at CAPs and Glasses and doing some graphical analysis and looking at other models, it seems to be about 4%. That means that if the petrol is worth 48% of the purchase price at 3 years, then the diesel is worth 52%.

On this assumption (4% better for the diesel), then you save £100 or so if you buy a diesel. If you think it's 3% then the numbers are different, and the petrol is cheaper. 0% means that you think both cars will depreciate at the same rate:

After 3 years:
4%: £40 to £150 (diesel is cheaper)
3%: -£125 to -£50 (petrol is cheaper)
2%: -£295 to -£240 (petrol is cheaper)
0%: -£645

The first number is for the lowest spec car, and the second for the highest spec. Reduce the number if you are keeping the car for less than three years.

For example: if you think the diesel depreciation is 3% better than petrol, and you have a mid-spec car, then choose -£100.

Remember your number...

Step 2: Running costs.

If you do 12,500 miles a year or more, then here is the table:

First 12,500 miles: £203
Next 12,500 miles: £161
Next 12,500 miles: £252
Next 12,500 miles: £161

For example: you plan to do 37,500 miles in the car, then add £203 + £161 + £252 = £616, meaning the diesel will be overall £616 cheaper to run in terms of fuel and servicing.

If you do less than 12,500 miles a year, then here is the table for you:

If you do 3,000 miles a year then:
Year 1: £32
Year 2: -£11
Year 3: £181
Year 4: -£11

If you do 6,000 miles a year then:
Year 1: £86
Year 2: £43
Year 3: £135
Year 4: £43

If you do 9,000 miles a year then:
Year 1: £140
Year 2: £97
Year 3: £189
Year 4: £97

For example: If you do just 6,000 miles a year and you are going to keep the car for 3 years, then £86 + £43 + £135 = £264.

Step 3: Add the two numbers together.

This will give you the saving/cost of running a diesel. A positive number is the amount the diesel is cheaper, a negative number means the petrol is cheaper.

For example: if I use my two italic examples above I have to add £616 from step 2 to -£100 from step 1, to make £516 (the diesel will overall be £516 cheaper for me to own).

Assumptions:

I used fuel prices of 96/97p, standard service charges, mpg from the economy survey, OTR prices from the current price list. Of course the validity of the result depends on many other factors - like the condition of the car when you sell, how you sell, how you drive (mpg) and so on. So this is just a like-for-like guide.

30th July 2007, 12:18	#1 (permalink)
Pottsy Administrator Civinfo master Join Date: 10th April 2006 Location: Leics Posts: 5,039 Thanks: 13 Thanked 94 Times in 50 Posts	Petrol or Diesel - an analysis of ownership costs This question has come up a few times before - which is cheaper to own? The diesel costs £1240 more to buy. But it's not as simple as that... Step 1: Depreciation. The basic cost of owning the car is simply the amount you lose from buying to selling. The depreciation of a diesel is always less than it's identical petrol (because it is a more desirable option to both the used buyer), but how much less? Looking at CAPs and Glasses and doing some graphical analysis and looking at other models, it seems to be about 4%. That means that if the petrol is worth 48% of the purchase price at 3 years, then the diesel is worth 52%. On this assumption (4% better for the diesel), then you save £100 or so if you buy a diesel. If you think it's 3% then the numbers are different, and the petrol is cheaper. 0% means that you think both cars will depreciate at the same rate: After 3 years: 4%: £40 to £150 (diesel is cheaper) 3%: -£125 to -£50 (petrol is cheaper) 2%: -£295 to -£240 (petrol is cheaper) 0%: -£645 The first number is for the lowest spec car, and the second for the highest spec. Reduce the number if you are keeping the car for less than three years. For example: if you think the diesel depreciation is 3% better than petrol, and you have a mid-spec car, then choose -£100. Remember your number... Step 2: Running costs. If you do 12,500 miles a year or more, then here is the table: First 12,500 miles: £203 Next 12,500 miles: £161 Next 12,500 miles: £252 Next 12,500 miles: £161 For example: you plan to do 37,500 miles in the car, then add £203 + £161 + £252 = £616, meaning the diesel will be overall £616 cheaper to run in terms of fuel and servicing. If you do less than 12,500 miles a year, then here is the table for you: If you do 3,000 miles a year then: Year 1: £32 Year 2: -£11 Year 3: £181 Year 4: -£11 If you do 6,000 miles a year then: Year 1: £86 Year 2: £43 Year 3: £135 Year 4: £43 If you do 9,000 miles a year then: Year 1: £140 Year 2: £97 Year 3: £189 Year 4: £97 For example: If you do just 6,000 miles a year and you are going to keep the car for 3 years, then £86 + £43 + £135 = £264. Step 3: Add the two numbers together. This will give you the saving/cost of running a diesel. A positive number is the amount the diesel is cheaper, a negative number means the petrol is cheaper. For example: if I use my two italic examples above I have to add £616 from step 2 to -£100 from step 1, to make £516 (the diesel will overall be £516 cheaper for me to own). Assumptions: I used fuel prices of 96/97p, standard service charges, mpg from the economy survey, OTR prices from the current price list. Of course the validity of the result depends on many other factors - like the condition of the car when you sell, how you sell, how you drive (mpg) and so on. So this is just a like-for-like guide.