Petrol Car vs Diesel Car

I was searching on this topic when I wanted to buy new car. There is plenty of information available but I did not find anything targeted specifically at what I was looking for. Here is kind of consolidated list of all the arguments, my own thoughts and my conclusion. For other things, interested people can have a look at Team BHP site, http://www.team-bhp.com/
You will find most of your car queries answered there.

Coming back to the topic, When going for new car, apart from the company and model, you have the choice about the fuel. So which fuel you should use?
There is significant cost difference between initial price of petrol and diesel vehicle. Price wise diesel car would become preferable only if you are able save enough money (because of cheaper fuel and better mileage of diesel) to compensate for this initial price difference.

Petrol prices are lower in India than diesel. Reason for this is not very technical. Its mostly because diesel is subsidized. Diesel is used in heavy vehicles for Good's transport and hence the subsidization. This keeps the commodity prices low as transportation cost is reduced. Many car manufacturers manipulate this basic price difference and come up with car engines that can consume Diesel. Diesel engine cars are not very popular in western countries and also all premium vehicles almost exclusively run on Petrol.

Technically speaking, Diesel should be cheaper than petrol because Diesel is less refined than Petrol in distillation process and hence Diesel production is cheaper than Petrol production. But this production cost wise difference is smaller and difference that we see in India is larger and out of proportion because of the subsidization.

Petrol engines have better performance characteristics and lesser maintenance. Diesel produces more soot and is more sensitive to fuel and oil contamination, hence maintenance cost is higher. Also diesel engines produce more vibrations. Higher maintenance cost is also aggravated because of higher compression of the diesel engines. As there are no spark plugs in diesel engines, more compression is required to keep the engine running.

Diesel engines are mostly used in high power, slow acceleration vehicles and compared to Petrol, diesel have more resale value. All above arguments about diesel engines are getting more and more weaker with newer diesel engines which incorporate advanced technology like Common Rail Direct Injection (CRDI) and hence buying a diesel car is making more and more sense.

One interesting thing to note is, though, that diesel cars are costlier than petrol cars. Typically price difference is 80000rs to 100000rs in India. And also rate of growth of Petrol prices is much higher than that of diesel. As diesel price change has more impact on economy, government cannot change diesel prices very frequently and with same rate as that of petrol. Having petrol car affects you psychologically more. Because you pay higher per km, you think more before using a petrol car. In case of diesel you hardly need to worry about the fuel consumption as price you pay per km is much lesser than Petrol. Even when you compare public transport rates per km with that of diesel car, diesel is on par. This has huge positive impact on your mind and you tend to use your diesel car more frequently than equivalent petrol car.

After all above arguments I still feel that petrol car is more value for money than diesel cars. Hence couple of years back, I chose to go with petrol car. Diesel car purchase would become good deal only after certain period of time. To achieve this break even(because you pay higher for diesel engine) it might take 2yrs to 5yrs depending on usage. My recommendation is, only if you have 15000km running per year, you should go for a diesel car.

Here is some interesting maths, which can prove my point -
Following is the total cost to travel 500km by both fuels, with current fuel rates in Pune :
2737.69rs : with petrol, distance - 500 km, price - 71.18rs/litre, 13kmpl avg
1271.47 : with diesel, distance - 500km, price - 43.23rs/litre, 17kmpl avg
hence difference : 1466 for 500km i.e. 2.932rs/km difference
Initial price diff between petrol and diesel car - 80000rs
hence, you need 27285.12 km running before diesel car is more profitable.

Some of you might not agree with average of diesel and petrol engine. Hence following is revised calculation which is more in favour of diesel cars because these averages are not realistic -

cost to travel 500km by both fuels, with current fuel rates in Pune :
3235.45 : with petrol, distance - 500 km, price - 71.18rs/litre, 11kmpl avg
1080.75 : with diesel, distance - 500km, price - 43.23rs/litre, 20kmpl avg
hence difference - 2155 for 500km i.e. 4.312rs/km difference
Initial price diff between petrol and diesel car - 80000rs
hence, you need 18561.48 km running before diesel car is more profitable.

I have not considered higher maintenance cost associated with diesel(like diesel engine oil is costlier). Obviously if you own car for more than 5 yrs, eventually diesel car would turn out to be more profitable. But you should also consider that if you can invest 80000(difference between petrol and diesel car) in fixed deposit, it would generate enough interest. This interest you can again put in buying more petrol. This would mean that you would achieve the break even at even later stage. If you are buying car on loan then obviously this break even could take even longer.

Overall I favour Petrol car over Diesel, as of now at least.

P.S. : Before I conclude, some account of total spending I have done on my car(i10 magna, kappa engine oct 2007 purchase) in last two years - Insurance, 9000(second year), 7500(third year)
Paid servicing - once, 3000
Oil change - 900*3=2700
other expenses - some painting 2000, some stupid mouse ate by windshield fluid pipe which costed me around 300rs
Total expenses - 25000 in two years