Petrol v Diesel Analysis Part 1

[IXPLOR]

Evening all,

I have been procrastinating about diesel versus petrol over the past few weeks as I am purchasing a new car hopefully tomorrow and offer up the following analysis on retained value petrol versus diesel over 5 years. Note this stage 1 analysis does not take into account servicing costs, fuel consumption, additional interest on greater financed sum or risk profile once factory warranty runs out.

For starters we all know a Diesel commands a higher purchase price currently some 7k over the petrol counterpart. The numbers below were derived as an average from various valuing sources available on the internet and based on highest klms for the MY and lowest trade in price to set a benchmark year on year, based on todays available 5 year historical data.

2011 GC Laredo
Diesel 50k drive away in 2011 Trade today 20k with 130k klms - $30k loss
Petrol 45k drive away in 2011 Trade today 17k with 130k klms - $28k loss

2012 GC Laredo
Diesel 50k drive away in 2012 Trade today 24k with 100k klms - $26k loss
Petrol 45k drive away in 2012 Trade today 20k with 100k klms - $25k loss

2013 GC Laredo
Diesel 51k drive away in 2013 Trade today 27k with 75k klms - $24k loss
Petrol 46k drive away in 2013 Trade today 24k with 75k klms - $22k loss

2014 GC Laredo
Diesel 53k drive away in 2014 Trade today 30k with 50k klms - $23k loss
Petrol 48k drive away in 2014 Trade today 26k with 50k klms - $22k loss

2015 GC Laredo
Diesel 56k drive away in 2015 Trade today 34k with 25k klms - $22k loss
Petrol 50k drive away in 2015 Trade today 28k with 25k klms - $22k loss

I find this data interesting the Petrol based on the data above doesn't appear to devalue as much as the diesel however you also need to take into account the extra fuel usage for total cost of ownership figure over 5 years.

Factoring in the additional interest paid on financing the extra 5 odd k for a diesel over 5 years, additional service frequency and slightly higher (average 12 months) fuel price it appears to make the diesel appear a more costly choice over 5 years, then taking into account a greater fuel efficiency these numbers will most likely come back to within a few k of each other over 5 years.

So I surmise at this early stage the actual net difference between Diesel and Petrol over 5 years assuming the same distance has been travelled is negligible and FCA has got the pricing consistent to maintain value in both variants. In the end it appears to actually come down to personal choice and if you own a 3 tonne van you are towing around the country.

I believe a second hand looked after diesel will always sell quicker than a petrol variant in todays market.

Imagine if FCA chose to offer the diesel at maybe 1k more than the petrol or even 2k? that would change the game entirely.

[layback40]

would you be an accountant by any chance?
Purchasing a diesel instead of a petrol is more a personal preference thing. Some people like diesels, some like petrol. Its a bit like car colours or Ford v/s GMH.
If you base your decission purely on $$$$$ you will always end up unhappy with your car.

[SnakeDoctor]

Sorry mate, this is flawed.

The diesels in your list have a better resale in percentage terms.

Your post is basically that cheaper cars cost less, yeah they do.

[IXPLOR]

I thought that too initially when looking at percentage of initial purchase price, but this too is flawed as the percentage calculation on a higher initial amount will net a higher resale percentage proportionate to the initial cost.
When you look at initial purchase price relative to trade in difference at purchase the gap is 5 or 6k between Diesel versus Petrol then at trade in time the gap is 3 to 4k between them both excluding a 1 year old vehicle which retains the 6k initial difference in purchase price at trade in time.

No Layback40 not an accountant have been a business analyst in a previous life though.

I thought it was interesting to run the numbers as we are tossing up between a diesel of petrol currently and were trying to justify the 7k price difference. It appears it does come down to personal preference and if you are towing a heavy load consistently

Cheers

[HobartWK2]

Interesting. I work for a Fleet Leasing company and I find that Diesel variants of all models (4x4's) always sell better and quicker than their petrol cousins. They almost always out perform on resale as well. What is comes down for, what we call Whole of Life costs, is usage. A diesel driven constantly on short trips or stop start traffic will return poor fuel economy and will be more expensive than a Petrol vehicle to run. A diesel on longer hauls or regularly towing will always return better fuel economy then a Petrol. If you drive constantly in stop start traffic or many short trips, even if you do tow from time to time, I would recommend the Petrol. If you do reasonable runs, tow regularly then the diesel would be the go. Happy to show some figures if anyone is interested.


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[SnakeDoctor]

The 3.6 is soft, the 5.7 has bad resale, 6.4 is too expensive.

Easy choice for the Jeep GC imo.

[hills46]

SnakeDoctor is right, cheaper cars are cheaper. If you convert your figures to % of purchase then the diesels lose a lower percentage of purchase. FCA screw you over either way though. The purchase price for diesels is purely because they are more popular so they charge a premium. On top of that, the service interval is shorter so service costs are significantly higher. (I digress but why is the service interval for diesels in Oz 10,000km when overseas it is 10,000ml? And don't give me any harsher climate crap, that's why there is a schedule B for servicing.) Should add in the higher cost of diesel fuel as well which probably offsets the better economy.