Sunday , June 4 2023

Petrol vs Diesel Car Cost analysis

Now a days ‘Petrol vs Diesel car ‘ cost analysis is gaining popularity because of rising fuel prices and remarkable improvement in Diesel engine technology. Every car manufacturer is launching, both  petrol as well as diesel variant for same model of car. Diesel is cheaper fuel than petrol, diesel cars also give better mileage/fuel efficiency than a petrol car. Therefore diesel variants are more preferred than a petrol variant. However a technology of better mileage with a cheaper fuel does not comes free of cost. Diesel cars are approximately 1 lakhs costlier than a petrol car. So which car is better petrol or diesel ?

For diesel car investment is higher but its better fuel efficiency helps reduce expenses on fuel. Therefore  a question comes to everybody’s mind, which car to buy petrol or diesel . My ‘petrol vs diesel car’ cost calculator analysis will try to answer this question using an online calculator and a ready to download Excel based calculator.

Petrol vs diesel car cost analysis is carried out, just to provide a comparison of expenses and cost in long-term while maintaining both the variant of car. It is important to look into the expenses because we are purchasing car for a long-term use. There are other factors also which are required to be taken care while deciding for the petrol or a diesel car.

Compare expenses of a Petrol vs Diesel car

An Excel based ‘Petrol vs diesel car’ cost analysis calculator is available for download at the bottom. Basic method of comparison is to calculate the year wise fuel expenses of each car and find out the break even year of the costs when the total expenses of both the car are equal. The following input is required for the analysis.

  1. Cost of car: Since the cost of a diesel car is more than that of petrol car, the on road cost of both the car are required. Even if you are purchasing through a car loan, find the total cost of the vehicle.
  2. Fuel price: An average price of Petrol and diesel is required.
  3. Mileage of both the car: Mileage of a Petrol and a diesel car is required, however mileage is main input upon which the fuel expenses depends. Also more city rides gives poor mileage for both the variant. Consider realistic value for both the cars.
  4. Monthly usage: This is also an important parameter. Find out the total km of driving you do in a month. If your drive is more than 1000 km per month then a Diesel car is recommended. Therefore the commercial vehicle are a diesel car.
  5. Expected Rate of return on your investment: This is the interest rate you be will be getting after you invest the saved money that you have by not buying a diesel car ( Difference of cost of diesel car and a petrol car). If you are keeping the amount in bank saving a/c than it is 3.5% i.e the saving A/c interest rate.

How to calculate fuel expenses explained with an example

Petrol Car
Diesel Car
Fuel Price
12 km/l
18 km/l
Monthly usage
500 km
Difference of cost of both car
Rs. 100000
Expected Rate of return on your investment
3.5 % 


Now, Total Expenses for a Car in 1 Years

    \[E= \frac{Usage.12.Fuel_Price}{Mileage}\]

For Petrol car, 


For Diesel car, 


The interests per year of difference amount of the car’s cost

    \[ I= \frac{(100000 x 3.5)}{100} =3500\]

therefore, Expense on Petrol car in 1 Year= 32000-3500=Rs. 28500
Difference in expenses of Diesel car and Petrol Car in 1 Year= 28500-17333.3=Rs. 11166.7

    \[Break-even-of-the-cost = \frac{Difference-of-Cost}{Difference-in-expense} = \frac{100000}{11166.7}=8.95 \]

or 9 years

This is an example with fixed values, however in the Excel Calculator you can put your own values and get the results. A screenshot of the program is shown below, download the program from the link below and do your analysis by providing the above mentioned value.

petrol vs diesel car cost analysis



Petrol Vs Diesel car cost analysis
Petrol Vs Diesel car cost analysis
63.5 KiB

Authored by howtocalculate

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One comment

  1. Laying bare a straight fact, the diesel cars are quite expensive than their counterparts running on petrol. There is a considerable difference in the price with the diesel variants on most counts pegged at least by a lakh higher than the petrol version.When the factor of on-road price is taken into account the gap further widens as the registration procedure for the diesel variant involves a steep fee.

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