Your motor: Petrol versus diesel

Diesel cars were once seen as dirty and sluggish but, ultimately, fuel-efficient workhorses, and the choice between buying a diesel or petrol-powered car basically came down to a choice between economy and performance. But is this still the case?

Improvements in engineering have meant that diesel engines now perform much better and are more comparable, in performance terms, to petrol engines. The flipside is that new petrol engines are far more fuel-efficient than their predecessors, and given the fact that diesel now costs more at the pumps than petrol, can diesels still be considered the more cost-effective option for motorists?

Let’s don the leather driving gloves and take a look…

The cost on the forecourts

If you’ve been pricing up new cars in preparation for the new registrations then you’ll most likely have found that diesels are, on average, a couple of grand more expensive than petrol variants – and this is basically because diesel cars cost more to build.

Diesel engines need to be reinforced to cope with the fact that pressure is used to ignite the fuel – as opposed to spark plugs, which are used to fire up petrol – which makes them heavier than petrol engines. This means they require stronger engine mounts and more robust suspension.

The cost of the extra materials is then factored into the final showroom price. And diesel cars could be about to get even more expensive as tighter emissions targets will require more costly exhaust systems, which could trigger an exponential growth in build costs.

So if the purchase price is your main consideration, petrol cars are the more cost-effective option.

Dealing with depreciation

The usual considerations when choosing a new car are things like fuel economy, performance, number of seats, etc. But one thing that should also be factored in is depreciation - that is, how much your car will devalue while you own it.

Depreciation is worst on new cars. The old adage that your car loses value the second you drive it out of the showroom is true and as much as 60% of the value could be knocked off a well-maintained car in the first three years it’s on the road.

This is where diesels hold their own as they tend to depreciate at a slower rate than petrol cars meaning that they maintain a better sell on value.

However, we’ve already established that diesels are more expensive to buy and so this, along with potentially higher servicing costs, will need to be offset against depreciation – new car buyers will feel this one the most.

Factoring in the fuel economy

The cost of a litre of unleaded first broke the £1 barrier in 2007, and if we see prices rise as sharply as they did six years ago – the same litre of unleaded cost 86p in 2006 – then we’ll be paying upwards of £1.50 a litre sometime next year - so fuel economy is a primary concern when working out the running costs.

Diesels have always outperformed petrol cars when it comes to fuel economy - particularly on motorways – generally giving up to 30% more miles to the gallon.

However, the newer generation of smaller, lighter and more fuel-efficient vehicles are closing the gap. And this, together with the fact that petrol cars are cheaper to buy and fill, means that petrol may be the more cost-effective option for drivers who cover fewer than 12,000 miles each year.

On the other hand, the better fuel economy enjoyed by diesels means they’re still a better option for anyone who travels significantly further than this each year.

The price at the pumps

There was a time when you’d pay more for a litre of petrol at the pumps than you would for a litre of diesel, but this has been turned on its head in recent years and a litre of diesel now costs, on average, around 7p per litre more than petrol.

The reasons for this range from some cynical foresight from the government which, upon seeing a growing demand for diesel engines, promptly whacked up the prices accordingly, to the fact that it now costs more to produce a barrel of diesel than it does to produce a barrel of petrol.

And although 2012 saw diesel cars take 50% of the market share for the first time ever, the government can’t be to blame in this instance (but the government is ALWAYS to blame) as duty is set at 75% for both petrol and diesel, as well as for biodiesel and bioethanol.

The second argument seems to have mileage though; whereas a barrel of petrol used to cost more to produce than a barrel of diesel, the opposite is now true as the production of modern, low-sulphur diesel requires more crude oil and involves a more complex refining process.

Ultimately, these costs are passed on to consumers at the fuel pumps and this has major implications for the petrol versus diesel debate.

And the winner is…

…up to you to decide.

Generally speaking, through a combination of lower purchase price, cheaper fuel and improved economy, petrol cars are the more cost-effective option for motorists who drive no more than 12,000 miles per year.

However, the greater fuel efficiency of diesel engines means they should remain the vehicle of choice for motorists who expect to break the 12,000 miles per year mark.

Diesels tend to benefit from lower road tax due to their lower CO2 emissions but there’s no real rule of thumb when it comes to car insurance and how much you pay for cover will be determined by things such as your age, the make and model of the vehicle, the number of years no claims discount you’ve accrued and more.

When making a decision you should never disregard the drivability of a vehicle – although they look the same, petrol and diesel vehicles are two very different beasts and some people simply prefer to drive one over the other.

So the best advice would be to crunch the numbers, take a few test drives and then pick your winner.

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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