Diesels are cheaper than petrol cars...for some of us

by Robert Powell on 26 April 2012  |  21 comments
Tweet

Drivers have to do 10,000 miles per year to make buying a second-hand diesel car cheaper than a petrol model, say industry experts

The disagreement that dogs the motoring industry: diesel or petrol? Yes, the tiff between the two types of motor is still rumbling on. Which is cheaper? Which is greener? Which give a smoother ride? I could go on…

But while several of these questions are still left unanswered, one group of industry experts has now waded onto one of the key battlegrounds with a convincing response.

The ‘golden numbers’

Experts at Glass’s Guide, the bible for many car dealers, have calculated that motorists must drive 10,000 miles every year to make a second-hand diesel car cheaper than a petrol model. For new diesel cars, the figure is lower at 6,000 miles per year.

These ‘golden numbers’ were arrived at by analysing thousands of car prices and fuel costs. Diesel cars command a strong premium over their petrol cousins, but have a far better fuel economy than petrol models, meaning motorists will save money if they drive enough miles.

Glass’s Guide says that the average cost of a new, family-sized diesel car is £1,300 more than its petrol equivalent. This difference is even greater for second-hand cars, thanks to the high resale values of diesel models. It’s estimated that an average three-year-old family car running on diesel is £2,000 more expensive than a petrol equal.

This increase in resale value has been driven by strong levels of demand from motorists looking to beat soaring petrol prices. Improvements in diesel technology that have led to a smoother driving experience have also played a part. Demand has now grown so strongly that half of all car sales made in 2011 were diesel.

The future

So in light of this recent surge in demand for diesel models, what does the future hold for the price of diesel cars? Well, Glass’s Guide predicts the gap between diesel and petrol cars will remain constant.

Adrian Rushmore from the guide said: “More and more used diesels are coming on to the market and with new diesel car sales surpassing petrol last year, we’re only going to see an increase in the amount available on the second-hand market. This increased availability should stop used car prices rising too much further.”

But there are still several other factors to consider when making the choice between diesel and petrol.

Fuel prices

As we reported back in February, the first few months of 2011 have seen diesel accelerate in price at a far faster rate than petrol. This has begun to slow marginally; however diesel is still over 5 pence per litre (ppl) pricier than petrol at 147.9ppl compared to 142.5ppl, according to The AA.

Take a look at How to find the cheapest diesel and petrol prices for some tips on slashing your fuel spend.

Car tax

Diesel cars cost less in road tax, thanks to their green credentials. The bands for the tax are divided up according to CO2 emissions. So the greener the car, and the less you damage your wallet, as well as the environment. This is good news for diesel cars as they are usually more efficient than their petrol equals.

MSN Cars recently put together the top ten most economical cars. Seven diesel models appeared in the list, all with CO2 emissions below 100g/km – making them eligible for free road tax. MSN named the Kia Rio 1.1 Ecodynamics as the greenest model, with emissions of just 85g/km.

Insurance

Whether you drive a diesel or petrol car will also affect your insurance premiums. esure estimates that diesel models are on average 10% more expensive to cover than their petrol equals, due to higher repair costs.

Depreciation

As I’ve already mentioned, diesel cars hold their value far better than petrol models. Read The cars that depreciate the fastest for a rundown of the new models that lose their value most rapidly.

What do you think?

Which is cheaper? Diesel or petrol?

Let us know using the comment box below.

More on cars:

The most expensive petrol in the world

Car finance: a terrible way to pay for your new car

Car vs public transport: An old banger is cheaper than the bus!

Motorhomes: how to make money from caravans!

RAC vs AA vs Green Flag: The best value breakdown cover