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Old 16th September 2014, 15:24   #196
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Default Re: Petrol versus Diesel Cars

Opportunity cost of the additional money paid to buy a diesel car should also be kept in mind. Let's assume there's a price differential of 1,00,000 Rs between a petrol and diesel car. Keeping this money in bank for 5 years with 8% interest rate, would yield 53,000 Rs as interest. So even if a diesel vehicle has higher resale, the gains would be offset by the bank interest you get by the money saved upfront.
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Old 16th September 2014, 15:39   #197
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Default Re: Petrol versus Diesel Cars

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Originally Posted by blacksport View Post
With prices between the fuels closing rapidly, it is just a matter of months before the difference in used car prices evaporates. The current used car prices reflects the trends from the previous era, with people who paid higher prices hoping for higher returns, are not able to accept the new reality. Once the clamour for diesels come down, used car prices will correct itself. Just a few months more.


Its a never ending debate between the Diesel and Petrol cars. But there has been a steep rise in the diesel prices from INR 47 to INR 68 in less then 18 months time. For an average 18-20K annual mileage hatchback or entry level sedans, petrol cars are making a strong case for themselves. Its not the same case as it was in from 2007-2008 till 2012.
And one advantage of converting to CNG is surely a big plus for petrol cars.

I strongly feel that used cars market willl see a correction soon.
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Old 16th September 2014, 15:47   #198
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Default Re: Petrol versus Diesel Cars

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Originally Posted by jessie007 View Post
1) Higher resale value of diesel vehicle - if higher initial cost is considered, higher resale value should also be considered.
That was the case pre-deregularization of diesel. People preferred diesels as they trusted in the long run the differential will be made up for.

But now after the change in pricing kicking in and the price gap ever reducing that perception itself is changing and that's the reason we are having this discussion.

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Originally Posted by Zodak View Post
Opportunity cost of the additional money paid to buy a diesel car should also be kept in mind. Let's assume there's a price differential of 1,00,000 Rs between a petrol and diesel car. Keeping this money in bank for 5 years with 8% interest rate, would yield 53,000 Rs as interest. So even if a diesel vehicle has higher resale, the gains would be offset by the bank interest you get by the money saved upfront.
+ 1 to that.

Here quoting my post from another thread where we were discussing C2 segment petrol sedans. That small calculator is pretty handy to do the petrol-diesel maths

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Originally Posted by SoumenD View Post
For a usage based comparison(between diesel and petrol), came across this link which gives a detailed enough spreadsheet based on usage.

http://aravindavk.in/diesel-vs-petrol-car/

For an average usage of 1000-1100 kms a month petrol cars seem to be easier on pocket if its used for around 5 years and the fuel price gap remains same.

Last edited by SoumenD : 16th September 2014 at 15:48.
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Old 16th September 2014, 15:48   #199
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Default Re: Petrol versus Diesel Cars

All depends on the kms/year the vehicle is used for. Considering diesels give more kms/ltr, it is a no brainer for a person who runs his vehicle more.

Just looking at the above example (as seen somewhere here on T-bhp)

the loss on petrol would be 7-3.5=3.5 (as initiall you loose 7 from your hand, even though 1 goes to the savings). So effectively it becomes 3.5-1 = 2.5

Considering the higher FE of a diesel, seems sensible to me.
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Old 16th September 2014, 15:51   #200
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Default Re: Petrol versus Diesel Cars

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Originally Posted by blacksport View Post
Taking your own example, with diesel, I spend 7L and get 4.3 at sale. Total loss = 7-4.3 = 2.7.

With petrol, I spend 6L and get 3.5 at sale. Total loss = 6-3.5 = 2.5.

Now, add the interest you accumulate for the 1L saved on initial cost over several years. The 1L simply doubles to 2L in 7 years.
On the same line, you have to consider the following cost difference as well.
I had considered Zest mileage (assumptions) for this and also assumed Petrol & Diesel cost to be the same at Rs 75/- with a monthly running distance of 1000 kms.

Diesel = 1000 / 18 kmpl = 55 ltrs @ 75 Rs => Rs 4166/-
Petrol = 1000 / 11 kmpl = 90 ltrs @ 75 Rs => Rs 6818/-

So per month difference is 2,651/- for diesel over petrol which is around 650/- more than the 2% interest we earn for one lakh which 2,000/-.

I think the numbers that I assumed here (75/- for diesel price & 2% interest) are made to favor petrol cars even though they are on higher side to present reality.

Although I'm not in favor of either petrol/diesel, from a economic point of view, both cars remain same and the additional amount on diesel should not be seen as a premium over petrol.

I feel market is right now in a situation where cars will be bought depending on how they drive? And not on which is economical to drive because lot of factors between petrol & diesel will negate each other and might make the investment experience same for the buyer. (assuming a drive of 1000 km per month)

For ex: Both Duster & Zest which I'm following closely are recommended by various reviewers towards their Diesel engines which are fun to drive. The same could be same of some other cars for their petrol engines.
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Old 16th September 2014, 16:05   #201
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Default Re: Petrol versus Diesel Cars

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Originally Posted by mrbaddy View Post
On the same line, you have to consider the following cost difference as well.
I had considered Zest mileage (assumptions) for this and also assumed Petrol & Diesel cost to be the same at Rs 75/- with a monthly running distance of 1000 kms.

Diesel = 1000 / 18 kmpl = 55 ltrs @ 75 Rs => Rs 4166/-
Petrol = 1000 / 11 kmpl = 90 ltrs @ 75 Rs => Rs 6818/-
Zest petrol 11 KMPL only. Don't you think it can give 13-14 KMPL like other petrol Entry Level Sedans are giving these days.
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Old 16th September 2014, 16:38   #202
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Default Re: Petrol versus Diesel Cars

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Originally Posted by jessie007 View Post
I don't think market dynamics work in exactly this manner. Demand & supply is one thing, but another important aspect is the purchase price of a new vehicle. Its not that people bought diesel vehicles at a price higher than for what it was being retailed at. If the price of the new vehicle drops, then only can it affect the resale price in a major way. Like when Honda dropped the price of Jazz by around Rs. 1 lakh, or like when Ford dropped the price of Fiesta.

There has been no drop in the ex-showroom prices of diesel vehicles, so this aspect shouldn't have any effect on the resale value of diesel vehicles. Reduced demand on the other hand, can have a bit of an impact and affect resale price, but not very drastically. Resale prices won't just drop from say Rs 3 to 2 lakhs or even to 2.5 lakhs; it might come down to say around Rs 2.85 lakhs which translates to around 5% correction, just as an example.

Also the fuel price difference is set to stabalize at the Rs 10 mark, as both fuels are now priced as per prevailing crude prices in the international oil market. This difference will not reduce to say Rs 5, barring individual state taxation policies like in Goa.
Even I don't think that the resale price would fall drastically. But then the initial price paid would only play a minimal role in determining the resale price. What matters in the used car market is demand. If demand comes down, irrespective of what the seller feels about the price he paid for acquiring the car, he won't get anything more that what the potential buyer is willing to pay.

As a ballpark, if the price of petrol and diesel (fuels) become equal, the resale prices of the respective cars would become similar. Now that the fuel prices are very close to each other, the resale prices should also come closer.

There would definitely be some resistance from sellers, since it would be difficult for the current diesel car owners to digest the fall in resale prices. But that resistance would be overcome in a matter of months.

Quote:
Originally Posted by mrbaddy View Post
Diesel = 1000 / 18 kmpl = 55 ltrs @ 75 Rs => Rs 4166/-
Petrol = 1000 / 11 kmpl = 90 ltrs @ 75 Rs => Rs 6818/-
I am fine with all the arguments you have made, except that you have given too high a mileage for the diesel. In similar conditions, the numbers would be closer. 18kmpl for diesel is a realistic mileage in the highway, while 11kmpl for petrol is a reasonable mileage in the city.

What would tilt the balance in favour of petrol would be the initial cost of ownership. Now that the difference in running costs are coming down, people would tend to move towards petrols.

Last edited by blacksport : 16th September 2014 at 16:45.
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Old 16th September 2014, 16:45   #203
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Default Re: Petrol versus Diesel Cars

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Originally Posted by blacksport View Post
There would definitely be some resistance from sellers, since it would be difficult for the current diesel car owners to digest the fall in resale prices. But that resistance would be overcome in a matter of months.
I agree. Also, I have noticed another point. Some people out in the market for a used car even beofre petrol price slash, preferred used petrol cars over used diesel cars. Their logic, diesel cars generally log starship mileage and are often abused and are generally put to sale when they start falling apart.
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Old 1st December 2014, 16:25   #204
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Default Re: Petrol versus Diesel Cars

France now looking to phase out diesel cars.

http://www.reuters.com/article/2014/...0JC1RU20141128

http://www.iol.co.za/motoring/indust...cars-1.1788744

More and more countries are re-thinking their love for diesels. Shouldn't India take a step forward and increase taxes on diesel vehicles?
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Old 1st December 2014, 16:45   #205
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Default Re: Petrol versus Diesel Cars

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Originally Posted by civic-sense View Post
France now looking to phase out diesel cars.

http://www.reuters.com/article/2014/...0JC1RU20141128

http://www.iol.co.za/motoring/indust...cars-1.1788744

More and more countries are re-thinking their love for diesels. Shouldn't India take a step forward and increase taxes on diesel vehicles?
No. I do not see any plausible reason.
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Old 1st December 2014, 17:44   #206
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Default Re: Petrol versus Diesel Cars

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Originally Posted by civic-sense View Post
France now looking to phase out diesel cars.

http://www.reuters.com/article/2014/...0JC1RU20141128

http://www.iol.co.za/motoring/indust...cars-1.1788744

More and more countries are re-thinking their love for diesels. Shouldn't India take a step forward and increase taxes on diesel vehicles?
India still has to go through the whole charade of ultra-low sulfur diesel, particulate filters and trying to clean diesel emissions before arriving at the same conclusion the Europeans, the Californians and the Japanese reached - there is no such thing as clean diesel.
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Old 1st December 2014, 18:31   #207
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Default Re: Petrol versus Diesel Cars

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India still has to go through the whole charade of ultra-low sulfur diesel, particulate filters and trying to clean diesel emissions before arriving at the same conclusion the Europeans, the Californians and the Japanese reached - there is no such thing as clean diesel.
StarScream - to put it simply - there is no such thing as CLEAN FOSSIL FUEL.
Any fossil fuel will always pollute. But taxing diesel vehicles just for the sake of it as suggested by @civic-sense is not the solution IMO. Those who buy SUVs will still buy them. There is plenty of money in India. Only the poor like me who buy small 1.3L diesels will end up paying the penalty. Thats not equality.

Also, does making petrol SUVs solve the problem? Not at all. The heavy vehicles always are better off on diesel. Fact remains that diesel is affordable and practical for long distance usage. The only solution is greener fuels. Unless those are developed, the world has to move on available options.
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Old 1st December 2014, 19:01   #208
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Default Re: Petrol versus Diesel Cars

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StarScream - to put it simply - there is no such thing as CLEAN FOSSIL FUEL.
Any fossil fuel will always pollute. But taxing diesel vehicles just for the sake of it as suggested by @civic-sense is not the solution IMO. Those who buy SUVs will still buy them. There is plenty of money in India. Only the poor like me who buy small 1.3L diesels will end up paying the penalty. Thats not equality.

Also, does making petrol SUVs solve the problem? Not at all. The heavy vehicles always are better off on diesel. Fact remains that diesel is affordable and practical for long distance usage. The only solution is greener fuels. Unless those are developed, the world has to move on available options.
We are not talking about banning diesel cars here. Discourage the use of diesel cars by increasing taxes, that's all. Would slow down new sales.

Western countries are taking the lead, and we as usual, would be slow to react.

ps: Last time I checked, "equality" exists only in utopia.
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Old 1st December 2014, 19:09   #209
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Default Re: Petrol versus Diesel Cars

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StarScream - to put it simply - there is no such thing as CLEAN FOSSIL FUEL.
Any fossil fuel will always pollute. But taxing diesel vehicles just for the sake of it as suggested by @civic-sense is not the solution IMO. Those who buy SUVs will still buy them. There is plenty of money in India. Only the poor like me who buy small 1.3L diesels will end up paying the penalty. Thats not equality.

Also, does making petrol SUVs solve the problem? Not at all. The heavy vehicles always are better off on diesel. Fact remains that diesel is affordable and practical for long distance usage. The only solution is greener fuels. Unless those are developed, the world has to move on available options.
Sigh, here we go again. Maybe I should just cut and paste my earlier replies. You confuse many issues in your post, with the always popular bogey of the poor man. The motorcyclist is definitely poorer than the man who drives a 1.3L diesel car!

But I digress. First let's deal with diesel vs petrol. Yes, you are right, both are nasty. It's just that one is nastier than the other. Diesel emits particulate matter, which does two things: it goes into your lungs and soot (in other words) is known to trap heat. Diesel emissions are notoriously hard to clean and diesel cars don't sell in places with the most stringent emission standards. Also look at any progression chart for Euro emission standards. There is hardly any change for petrol cars from Euro 4 through to Euro 6. Diesel is an entirely different matter. From Euro 4 to Euro 5 you need a change in fuel quality and filtration systems. Euro 6 makes it tougher still.

Having said that, commercial/heavy vehicles will always run on diesel, because of the torque and load-pulling abilities of the technology. Horses for courses. You don 't need it for cars or even light SUVs.

You say we've got to make do with what we have. Fair point. All I'm saying is that even there you have a choice and you can choose the lesser of two evils - petrol. Then there is affordability. Diesel is only cheaper in India because of 1) price and tax distortions and 2) because we haven't invested in fuel quality (which will make it more expensive than petrol.)

In the final analysis, do we need to break our dependence on fossil fuels and shift to more sustainable, greener fuels? Absolutely. I can't wait for electric, hybrid, hydrogen etc. to become mainstream because I am worried for our health and our planet.
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Old 1st December 2014, 19:29   #210
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Default Re: Petrol versus Diesel Cars

First of all, I'm not at all promoting pollution. I'm totally IN for greener transport solutions. So please don't get me wrong. I'm trying to put a different perspective as I don't always like to agree with the West's decisions.
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Originally Posted by civic-sense View Post
We are not talking about banning diesel cars here. Discourage the use of diesel cars by increasing taxes, that's all. Would slow down new sales.
I read you talked about taxes in the first post as well. I'm saying that is not the right way to do it. Its like adding taxes on cigarette. Does it help?

Quote:
Western countries are taking the lead, and we as usual, would be slow to react.

ps: Last time I checked, "equality" exists only in utopia.
There is no reason why we should always try to be in sync with the West. There are many more vital things in which we aren't.

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Originally Posted by StarScream View Post
Having said that, commercial/heavy vehicles will always run on diesel, because of the torque and load-pulling abilities of the technology. Horses for courses. You don 't need it for cars or even light SUVs.
Then do we need the V10/V12 Ferraris or Lamborghinis that the West makes and sells in huge numbers? Or the American gas guzzlers? If we are going to say that diesels are bad because the West is not using them - we should also look at what the west is using instead. Are their cars any greener by not using diesel? I'm pretty sure simply by gut feeling that the <1.6L diesels in India currently aren't far too worse than the ~2.5L or more cars used regularly in the US when we get the usage pattern + mileage + fuel consumption into consideration.

Quote:
You say we've got to make do with what we have. Fair point. All I'm saying is that even there you have a choice and you can choose the lesser of two evils - petrol. Then there is affordability. Diesel is only cheaper in India because of 1) price and tax distortions and 2) because we haven't invested in fuel quality (which will make it more expensive than petrol.)
I agree - we must put the infrastructure in place for a greener diesel. If that raises the price - YES that is valid and must be paid by the customer. This is the right way to go. Not keeping the bad diesel and adding tax on cars. Tax doesn't make the planet greener is my point.

Quote:
In the final analysis, do we need to break our dependence on fossil fuels and shift to more sustainable, greener fuels? Absolutely. I can't wait for electric, hybrid, hydrogen etc. to become mainstream because I am worried for our health and our planet.
We agree 100% on it my friend .
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