Should you sell your Petrol car and buy a diesel one?

June 1, 2012   ·   0 Comments

India is one of the biggest markets for diesel cars. Most of the people prefer diesel engines over petrol ones in this country. Why so? The debate between petrol and diesel engines is as old as the engines themselves. Basically, both engines have their own specialties and anyone opting for either of them is basing that on personal driving experiences. Similarly, CNG and LPG Engines also made their foray in the automobile industry mostly owing to their better fuel efficiency, cheaper running cost and eco-friendliness.

Petrol car owners are frowning. Petrol prices have gone up once again, while the prices of diesel have been left untouched once again by the government. This has widened the gap further between the two fuels which power most cars.

Petrol now costs 78.57 for a litre in Mumbai, while diesel is only 45.99 a litre. That explains why petrol car owners are unhappy. They are troubled by questions like: will I save money if I sell this old car and buy a diesel one? Or is fitting a CNG kit into the old car a better option?

While many petrol car owners started opting for diesel versions a while ago, the emerging trend is of fitting CNG kits into the old vehicles. Both these exercises can definitely save money, but there are some factors you should consider – mainly your usage and maintenance of the vehicle – before acting on these questions.

“If fuel cost is your worry, there are a couple of options before you. You can fit your existing car with a CNG kit or alternatively sell your petrol car and buy a diesel or a CNG car. However, change only if you drive at least 500 km every month,” says Uday Prabhu of Car Choice.

Economics of fitting a CNG kit

CNG (or compressed natural gas) is eco-friendly and it is also inexpensive. CNG, which is measured in terms of kilos, currently costs 33.10 in Mumbai, and offers a slightly better mileage than diesel. Though recent update from the cabinet is that price of CNG will hiked to 37 Rs. shortly.  The cost of a CNG kit falls in the range of 30,000 to 55,000, depending upon the make of the car.

For example, a CNG kit for a Hyundai Santro or a Honda City could cost you between 30,000 and 35,000. A kit for Honda Accord could cost you 55,000. The cost also includes the mandatory RTO endorsement.

However, a kilogram of CNG can give you an average mileage of 18 km, which means the average cost of driving every kilometre is only 1.89. Compared to this, a car like WagonR, which gives you an average of 14 km per litre of petrol, will cost you 5.67 per kilometre. So for every kilometre you drive on CNG, you can save 3.78

That means you can recover the cost of fitting your car with a CNG kit driving only 8,000 km. If you drive 1,500 km every month, or 18,000 km every year, you can save 68,000 on fuel cost alone.

“The mileage of a car improves once fitted with a CNG kit. Some large cars with more than 2,000-cc engine give a mileage of 7-8 km per litre on petrol. However, once fitted with CNG, the mileage improves to 11-12 km,” says Taranjit Singh of Dashmesh CNG Impex, a CNG kit supplier.

“As such, all car models are compatible to CNG kits, however, our mechanics check the condition of the car and its compatibility before starting the conversion process,” he adds. However, there are some drawbacks in fitting CNG kits.

“If the CNG kit is not authorised by the company, the car warranty lapses the moment you fit a CNG kit,” says Praveen Srivastava, of Pearl Honda, a Delhi-based Honda dealer. Not all manufacturers sell CNG-fitted kits. Maruti and Hyundai sell some models of their cars with factory-fitted CNG kits.

Another worry is higher maintenance cost. “CNG can corrode the engine of a car. Unlike a petrol car, you cannot ignore/delay car maintenance for CNG cars. The engine can get completely damaged if ignored,” says Banwari Lal Sharma, AVP (marketing), CarWale, Automotive Exchange.


Sell your petrol car and buy a diesel one

The resale market for petrol cars has seen a slump because of the recent spate of petrol price hikes. “Given the rise in petrol prices, second-hand petrol cars’ prices have moved down, as there are few buyers for petrol cars,” says Uday Prabhu.

Most of the existing petrol car owners are trying to sell their old cars. New petrol cars have also witnessed a dip in demand. “You should still explore this option (of selling the old petrol car) if you are keen on buying a new diesel or a CNG car and do some basic math to check its financial viability. Take into account the daily use of your car, amount of petrol spent and the likely loss in resale value of the car,” suggests Banwari Lal Sharma.

For example, let us assume that the daily running of your petrol car is 100 km. This means you will be spending 561 worth petrol everyday and around 16,830 worth petrol every month. If you sell your old petrol car for 4 lakh as against the market value of 5 lakh, you will be losing 1 lakh. But once you start using the new car, your fuel bill will drop by 50%, assuming it is a diesel or a CNG car, as you will be saving 8,000 on your fuel bill every month.

As a result, you will recover the lost money in the resale of the car within a year. However, do remember that diesel cars are high maintenance vehicles. Also, if you typically drive less than 500 km per month, the economics of switching may not really work, as you would lose on both ends – first, when you sell your petrol car and then paying more for a new diesel car.


It is clear that once the car is bought, the running costs of a diesel car will be far less than a petrol car. Possible less attractive performance is not that relevant in our busy Indian cities, where noise too is a daily issue to put up with. Hence, the only serious disadvantage of the diesel car in India is the higher purchase price and hence the only factor to consider for Indians is the daily run rate.

Source: Economic TImes, Car Dekho

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Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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