How long does it take to recover cost of a diesel car?
- Achin Jain
- Jan 20, 2021
- 2 min read
Updated: Mar 4, 2021
First thing first. This post is not about recovering the overall cost of a diesel car, but the incremental cost paid for diesel model over a petrol model of the same car.
I drive a 2015 VW Vento which has a 1.5 litre turbocharged diesel engine. Although I don't remember exactly now but I believe I paid a premium of ₹1.5L for diesel engine. At the time I had a commute of approx. 80 kms per workday. Recently, 6 years and 112,500 kms later, I came across a post on my favourite automotive forum, team-bhp.com i.e. Maruti now says, Diesel car costs can only be recovered after 260,000 km. Link to the post here.
According to India's largest car manufacturer, I still have 150,000 kms left to recover the premium I paid for my diesel car. I don't think so. I prepare financial models for a living, so I know how numbers can be massaged to prove any point. But how do you calculate the payback for a diesel engine. I don't know about Maruti's model; this is how I would calculate the payback for a diesel engine:
(on Jan 19, 2020, Delhi)
Cost of petrol: ₹85.20 per litre
Cost of diesel: ₹75.38 per litre
Mileage of petrol Vento: 12 kmpl
Mileage of diesel Vento: 18 kmpl
Driving cost of petrol: ₹7.1 per km
Driving cost of diesel: ₹4.2 per km
Diesel saving per km = ₹2.9
Payback period: 150,000 / 2.9 ≈ 51,750 kms
But there's interest cost involved in the ₹1.5L premium I paid at the time of buying the car. Assuming a rate of interest of 9% p.a. for auto loan, the saving of ₹2.9 would reduce by 9%.
Year 1 savings = ₹2.9 per km
Year 2 savings = ₹2.7 per km
Year 3 savings = ₹2.4 per km
Year 4 savings = ₹2.2 per km
Year 5 savings = ₹2.1 per km
Year 6 savings = ₹1.9 per km
Assuming I drive approx. 20,000 kms per year. My annual savings would be:
Year 1: 20,000 x ₹2.9 = ₹58,000
Year 2: 20,000 x ₹2.7 = ₹54,000, cumulative = ₹112,000
Year 3: 20,000 x ₹2.4 = ₹48,000, cumulative = ₹160,000 (cumulative ₹150,000 at 15,850 kms)
Hence, I would recover my premium at 55,850 kms.
Finally, a disclaimer: people say diesel cars cost more to maintain but I have not experienced any diesel exclusive expense in the last 6 years. A complete history of my maintenance expenses is listed in this post (Volkswagen Vento : Test Drive & Review). If there is any diesel exclusive expense, I would argue that it's counteracted by longer range and torque of a diesel engine.
Recovering the cost of a diesel car depends on factors like mileage, fuel efficiency, and maintenance. Diesel vehicles typically offer better fuel economy, which helps offset their higher purchase price over time. However, mistakes such as putting Petrol in Diesel can lead to costly repairs and slow cost recovery. In such cases, professional services from Wrong Fuel Drain Specialists are essential. Their expert petrol in a diesel car service safely removes contaminated fuel, preventing engine damage. Drivers can access these services quickly through petrolinadieselcar.co.uk, minimizing downtime. By maintaining correct fuel usage and ensuring regular maintenance, diesel car owners can protect their investment, improve efficiency, and recover costs faster while keeping their vehicle reliable and road-ready.