Petrol vs Diesel - How Does This Decision Affect Total Cost of Ownership

17 March


If you are looking to buy a new set of wheels there are lots of decisions to make, such as whether to opt for a manual or automatic transmission and also whether the vehicle will run on diesel or petrol.

Sluggish diesel cars are very much a thing of the past and modern vehicles which run on the fuel can perform just as well, or better, than their petrol counterparts.

Cost can be a fundamental factor in the final decision so how do they measure up against each other? We take a look at the comparative running costs.

Purchase price

The decision about which type of car to purchase begins at the original sale; petrol and diesel cars tend to be priced very differently at outset.

As a general rule, a diesel car will be more expensive to buy than a petrol car which can make it seem less attractive from the very beginning.

However, it's not just the purchase price which needs to be considered; diesel cars don't depreciate as quickly as petrol vehicles. On average they also have a longer lifespan too.

So whilst a cheaper car may sound the more appealing option, it can be a little short-sighted not to consider all of the facts.

Economy of fuel

Of course, the original purchase price is just a small part of the story. The running costs and the fuel economy have the potential to create a far bigger impact on finances.

Diesel is usually more expensive but will stretch further on the road so appearances can be deceiving. However, it won't work out cheaper for everyone; it depends on the mileage driven per year.

Experts suggest that if you drive more than 10,000 miles (in a used diesel car) or 6000 miles (in a new diesel car) the cost for fuel will work out cheaper in a diesel car. If you drive less than these amounts, a petrol car will be more cost-effective.

The other factor to consider is how long you plan on keeping the car. The fuel efficiency can make it far cheaper, but if you don't think you will be keeping the vehicle for a long time, the savings on fuel may not offset the extra in the purchase price.

The exact savings you make will of course be partly determined by the price of petrol and diesel, and with costs constantly rising, you might find the savings are greater and less than expected.

Tax and insurance

Other costs that need to be considered are the legal requirements to put the vehicle on the road.

Road tax is charged at different rates based on the CO2 efficiency of the vehicle; those that produce less don't have to pay as much.

In this area diesel cars are ahead of the pack, as they typically emit lower levels of CO2. It is however always worth checking the tax band before you make the purchase so you can factor in the right amount to your calculations.

For insurance, diesels aren't quite as advantageous and typically work out around 10-15% more expensive.

This is because the price of diesel cars is slightly higher, with less depreciation, plus the repair costs need to be more costly too.

In the past, the premium for diesel cars has been helped by the fact they were seen as far less sporty but recent improvements in their power and acceleration has diminished this.


Diesel and petrol cars have different financial outcomes depending on a number of factors. For less frequent, lower mileage driver’s petrol cars may work out as more economically viable whilst motorists who drive further could find they save money by switching to a diesel vehicle.

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