Diesel or Petrol Car? I Want To Save Money.
Overall Savings: If I told you a petrol car would cost you less money that a diesel car would you believe me?
The purchase of diesel cars has surged over the last 10 years as our nation desperately tries to save money on the already expensive cost of living. But my research suggests that a petrol car might be your hidden money saver.
Petrol cars are generally cheaper to buy than diesels cars but diesels are cheaper to run. So you’d be right in thinking that the more mileage you clock up the more money you save.
Buying a used car? Consider this
Diesel is currently more expensive than petrol in the U.K, and the wider the price gap becomes the longer it will take diesel owners to recoup their initial bigger investment.
But with a little “used car buying” research I’ve discovered that buying petrol is almost certainly going to save you money.
Why is a petrol car better for my wallet?
I’ll used a 5 to 6 year old Volkswagen Golf 5 Door which is a pretty typical family motor.
On paper the 1.6 litre petrol engine manages 39 MPG (miles per gallon) whereas the 1.6 litre diesel engine manages 62 MPG.
Yet the petrol engine still manages to come up trumps when it comes to saving money.
So why is the petrol a better buy?
First up and critically is the purchase price of both used cars. The Petrol versus Diesel debate
Check out my example below that I searched on 15th October 2014. I’ve used the two cheapest examples I could find within a 10 minute search.
First up is the Petrol Volkswagen Golf
Next up is the Diesel Volkswagen Golf
Both cars are virtually the same age, mileage and specification and each is in a popular colour (which can have an impact on price.)
But check the price differences.
The petrol Golf is £1705 cheaper than its diesel counterpart.
Close that gap
So now the question is “how long will it take me to make up the £1705 difference?
The answer lies in how many miles the driver will do each year.
For arguments sake let’s say the average John or Joanne will:
- Drive an average of 10,000 miles a year
- Petrol per litre @ £1.29 (this is just an average) at 39 MPG
- Diesel per litre @ £1.34 (this is just an average) at 62 MPG
For the Petrol Golf running at 39 MPG the annual spend is £1503
For the Diesel Golf running at 62 MPG the annual spend is £982
You are spending £521 more each year on fuel if you own the Petrol Golf.
But in my example you are spending £1705 less to buy a Petrol Golf that if you were to buy the Diesel model.
This means the petrol car makes you £1182 better off after the first year and £ 663 at the end of year two.
Other running costs
Finally let’s add in the road tax element that I know you’ve been thinking about!
The Petrol Golf costs £205 per year to tax and the Diesel Golf is just £30 per year.
Even when you include the added license fee for the Petrol Golf you are still better off by £1007 after one years motoring. Even at the end of year two you will find your wallet bolstered by a lip licking £488.
It’s not until you’re into year three that the Diesel Golf starts saving you money.
So in my example your cheapest motoring comes from a Petrol Golf being driven for around 10,000 miles each year and kept for up to two years.
It’s only after this point that the Diesel Golf will actually save you money.
Yes there are other variants to consider such as servicing costs but they are not significant enough to change the outcome of this example.
The Used Car Guys tip: Click here to read my post on “Petrol versus Diesel”debate