Petrol or diesel

Fuel prices are going up, so should you choose petrol or diesel for your next car? Our guide will help you decide

BuyaCar team
May 22, 2018

Rising fuel prices are threatening to put the squeeze on motorists. The cost of filling an average tank has increased by more than £4 already this year and further rises are expected.

The price of a litre of diesel now averages £1.30 and petrol is £1.27, according to RAC Fuelwatch, which monitors prices across the country. The cost has risen by 6-7p since the beginning of the year.

Combined with the prospect of future diesel charges and a new car tax scheme, the price changes can leave you in a daze when it comes to choosing between petrol or diesel cars - even before you consider hybrid and electric power.

Diesel sales have collapsed this year, with sales down by a third, but their appeal may grow as fuel prices rise. A diesel car is generally more expensive than an equivalent petrol model but typically around 10mpg more economical. As fuel becomes more expensive, the lower running costs of a diesel car are more likely to outweigh the higher purchase price.

 

Cost is likely to be a major consideration when considering petrol vs diesel:

  • Petrol will remain best for low-mileage drivers because of the higher cost of diesel cars and charges applied to older cars. Fuel economy is also improving.
  • Higher-mileage drivers may find that they can make significant fuel savings with diesel.
  • As fuel prices rise, the cost of hybrid and electric cars is slowly dropping, making them more cost-effective - particularly on shorter journeys.
  • Hybrid cars with low CO2 emissions will remain cheaper for business users, after company car tax for diesel cars was increased disproportionately.

Aside from cost, there's also the engine's performance to consider. Diesel engines often feel more powerful than petrol engines because you don’t have to rev the engine hard to get the best performance. This makes them great for towing and powering big cars like SUVs. Many of the very latest cars are also considerably cleaner than those that went before them.

However, petrol engines tend to be quieter, until you rev them. With more power available the higher they are revved, these engines feel sportier to drive and often produce an agreeable growl from the exhaust.

 

Diesel: the good

✔  Cheaper to run for high mileage drivers.
✔  Best for heavier cars and towing
✔  More economical than petrol

Diesel: the bad

More expensive to buy than petrol cars
May need regular repairs if only used for short, low-speed journeys.
Older diesel cars will be hit with surcharges

    

Petrol: the good

✔  More reliable for limited mileages and lower speed driving
✔  Cheapest to buy
✔  Sportier performance

Petrol: the bad

Less fuel-efficient than diesels
Power not as instant
Fuel is no longer much cheaper than diesel

Petrol and diesel fuel prices

For years, the price of diesel was consistently higher than petrol, which cancelled out some of the cost advantages of running a more efficient diesel-powered car. Then, as petrol tumbled in price during 2015, the cost of both fuels became virtually identical. Now the price difference is slowly increasing again; diesel is around 3p per litre more expensive than petrol, according to RAC Fuelwatch.

An average litre of diesel in mid-May cost £1.30, while petrol was around £1.27, which is between 6-7p more expensive than at the beginning of the year. Prices are predicted to continue to rise in the short-term, according to RAC Fuelwatch, but some economists think that prices could begin dropping by the end of next year.

If you're wondering how to interpret these continually changing prices, then the answer is to understand that prices will continue to change. If you there's little difference in cost between running a petrol or diesel car, based on your mileage, then it may not be worth making your selection on cost, as the situation could change.

On the other hand, if there's a significant difference in the amount that you'll pay to run a petrol or diesel car, then this is worth taking into consideration.

 

Is a petrol or diesel car cheaper to run?

Petrol cars are typically £500 to £2,000 cheaper to buy than diesel cars when brand new. Both petrol- and diesel-powered cars lose value at roughly the same rate, which means that it is normally cheaper to buy petrol cars on finance and as used models too.

A litre of diesel fuel might be more expensive than a litre of petrol, but the diesel will power a car much further than the petrol because diesel cars are more efficient. This usually makes every mile in a diesel car cheaper than in an equivalent petrol model.

In general, diesel offers better value for high-mileage drivers when fuel prices are high and there's little difference in cost between petrol and diesel.

Lower-mileage drivers will normally be better off with petrol (or hybrid or electric power). Petrol will be better for some higher-mileage drivers when costs are low and the price difference ios large.

Take a look at the example below, which is based on petrol and diesel prices remaining the same. If you’re covering 10,000 miles a year and want a best-selling Nissan Qashqai, then a petrol model will cost you less over three years. Drive 15,000 miles a year, though, and the efficiency of the diesel engine makes up for the higher price - just - making this model the cheapest option.

 

Nissan Qashqai running costs: petrol vs diesel

Car

List price

Fuel economy

Value after 3 years

Running costs (10,000 miles / yr)

Running costs (15,000 miles / yr)

Nissan Qashqai Tekna 1.2 DIG-T 115 (petrol)

£24,290

48.7mpg

£10,687

£16,720

£18,277

Nissan Qashqai Tekna 1.5 dCi 110 (diesel)

£25,910

70.6mpg

£10,882

£17,179

£18,253

This example is based on the car’s fuel costs and loss of value over three years, according to cap hpi, which specialises in car valuations. Other running costs such as road tax and servicing aren’t included. We’ve also used official mpg figures which are good for comparing the fuel efficiency of different cars but are higher than you’ll see in real-world driving.

 

Diesel car surcharges

London has already introduced the first low emission zone for cars, with its T-Charge, which began operating last October. It's likely to be just the start, with similar clean air zone schemes being set up around the country, which are set to target older diesel models in particular. You can read about the different proposals in detail, in our guide to diesel taxes and surcharges. The main points are below:

  • If you live or drive in London, then a diesel car could prove expensive (petrol cars are also better for city driving). Most cars on the road before 2006 are affected by the new £10-a-day T-Charge. This is due to be replaced by an Ultra Low Emissions Zone in 2019: most diesel cars from before September 2015 will be hit by the charge. See full details
  • Cars that don't meet the latest emissions standards (known as Euro 6) are more likely to be affected by future parking or emissions surcharges, particularly in other British cities. Find a Euro 6 car, which includes every new model registered since September 2016, and you have a better (but not guaranteed) chance of avoiding future charges
  • Brand new diesel cars were hit by a first-year tax surcharge from April this year, which pushed up new car prices. It doesn't affect tax rates in following years.
  • Some finance agreements will protect you if demand for diesel cars falls so much that their value plummets. If you take out PCP finance or lease your car, then you won't be liable for a sudden drop in your car's value. 

 

Choosing hybrid or electric power instead of petrol or diesel

Hybrid and electric cars are becoming increasingly affordable, more suited to long journeys and ever-more efficient. If fuel prices remain high, then you could make impressive savings. All bring large benefits for business users, as they have lower carbon dioxide (CO2) emissions, which results in reduced company car tax.

Pure electric cars are the top eco choice with no exhaust emissions and cheap electricity top-ups, particularly if you plug in at home. The range of cars on a single charge is rapidly improving; the latest Nissan Leaf can cover more than 135 miles before the batteries dip alarmingly low, and the new Jaguar I-Pace is expected to go even further. Smaller cars, including the Renault Zoe will cover at least 100 miles before needing to be recharged.  Electric cars are ideal for short distances but, due to their slightly higher purchase price, are more likely to offer savings to long-distance commuters, particularly if they can recharge at work.

Plug-in hybrid cars can also bring substantially lower fuel costs, but only for shorter journeys of between 20-25 miles. When fully charged, these vehicles can typically cover that distance on electric power alone. After this, a petrol or diesel engine takes over; the more this is used, the less you'll save, compared with a conventional car. Not everyone can save with these cars, due to their high purchase price and limited electric range.

Standard hybrid cars can are little more expensive than a standard model, but bring reasonable fuel savings; particularly in stop-start traffic. They can't be plugged on, and so the batteries are recharged by recovering energy that would usually be lost during braking. The engine is also used for recharging when it's efficient to do so. The electricity drives a motor for power at very low speeds and to assist a standard petrol or diesel engine during acceleration. Long journeys at steady speeds don't play to the strengths of a hybrid system, as there's little energy to recover.

   

Petrol vs diesel on the road

Diesel-powered cars used to be renowned for being slow, rattly and smoky. Not anymore. You might hear a bit more of a clatter when you start a modern diesel engine but it sounds little different to a petrol motor when you’re on the move.

Many drivers prefer the way that diesel cars feel to drive. They produce most of their power at low engine revs, which means that they accelerate strongly almost the instant that you press the accelerator - petrol engines usually need revving to deliver maximum power.

However, there is a new generation of petrol engines becoming available, which provide many of the benefits of diesel engines with fewer drawbacks. These engines are turbocharged, to provide more power with good fuel economy, and are also powerful without having to be revved.

These include Ford’s small 1-litre petrol engine that’s fitted to cars including the Ford Fiesta, Ford Focus and Ford B-Max, Nissan’s 1.2-litre petrol engine for the Nissan Qashqai and Nissan Juke, and the 1.5-litre petrol engine used in the Mini Hatchback. You can rev these engines more than a diesel for extra power, which makes them feel sportier.

Fuel economy is closer to the level of diesel engines, and harmful exhaust emissions are also lower, although some tests suggest that these small turbocharged petrol engines release far more harmful nitrogen dioxide gas on the roads than laboratory tests permit.

 

Petrol or diesel for low mileage drivers

If your next car is only going to be used for low-speed journeys - across town, for example - then it’s almost always best to opt for a petrol car. In these cases, a petrol car is likely to be cheaper anyway, but it’s also likely to be more reliable than a diesel car in these circumstances: modern diesels need regular high speed runs (on motorways or dual carriageways) to keep their systems working.

It’s because diesel engines produce higher levels of harmful emissions than petrol engines and these include particulates: microscopic soot particles that can embed themselves into lungs, where they can cause breathing difficulties. To reduce these emissions, modern diesel car exhausts are fitted with diesel particulate filters (DPFs), which trap the harmful particles. When these filters are full, the trapped particles need to be burnt off.

The car’s onboard computers recognise when this is needed and change the engine settings so that the exhaust gas is hotter than usual. This is easily done when driving at high speeds, but can be impossible during town driving. That’s why the filters in low mileage cars often get clogged, requiring a visit to the dealer and sometimes costly repair work.

                      

Are diesel or petrol cars best at holding their value?

The biggest cost of owning or financing a car is its reduction in value as it gets older - known as depreciation. It used to be the case that diesel cars depreciated more slowly, which meant that they cost less to run - even if their price was higher in the first place.

However, there’s less of a difference today, so petrol and diesel versions of the same family car will lose value at roughly the same rate. Because diesel cars are normally more expensive than petrol cars in the first place, they will cost a little more in depreciation.

That’s not true of all cars, though. Big, heavy SUVs with petrol engines usually use much more fuel than diesel versions, making them extremely unpopular on the second-hand market. If you buy a new version, you can expect its value to plummet. And that’s before you’ve even paid for the first costly fill-up.

The situation may change if demand for diesel continues to fall. Already, Cap hpi, which predicts used car values, has noticed that diesel cars are worth a little less than expected. It says that a three-year-old diesel car lost 10.5% of its value in the first nine months of the year, compared with the expected figure of 8.5%. Petrol car depreciation is at a record low.

You can protect yourself against an unexpected drop in value by taking out a PCP finance agreement or leasing a new car. In these cases, the risk of heavy depreciation is taken by the finance company.     

 

Petrol vs diesel car tax

Because diesel cars are efficient, they generally use less fuel per mile than equivalent petrol cars, which means that they emit less carbon dioxide (CO2) from the exhaust.

In theory, this should cut the cost of tax on brand new cars, as the first year of tax is based on CO2 emissions. However, a diesel surcharge has been in place since April. This moves diesel cars up by one tax band, increasing the cost by more than £300 in some cases, compared with a petrol car with the same emissions.

The tax is usually included in the price of the car, and these have already risen to take the change into account. As tax in subsequent years is charged at a flat rate, there is now little or no tax benefit in buying a diesel car.

The situation is difference for used car models. Any vehicle that was bought and registered before April 2017 is taxed under the old CO2-based system, which usually costs less for diesel drivers.

Company car tax is also based on CO2 emissions, which should make diesel cars cheaper. However, there is also a 4% surcharge on diesels, which increased from 3% this year. This has the effect of levelling the field for many models. If the cheapest company car tax is a priority, then a plug-in hybrid car, which can run on battery power alone for several miles, is likely to be the best option, short of a fully electric car.

 

Diesel vs petrol emissions

Diesel cars may emit less CO2 than petrol models, but they pump out higher levels of other pollutants, including nitrogen oxides (NOx) and tiny pieces of soot called particulates. They are blamed for up to 40,000 early deaths in Britain each year.

That's the reason why diesel vehicles are being targeted as parts of efforts to reduce air pollution. The latest emissions regulations should have made diesel cars as clean as petrol versions, but several studies have shown that diesels are still considerably dirtier in real-world driving.

The situation is improving - some brand new diesel cars have recorded low levels of emissions, and a new official European test is being introduced later this year, which will ensure that new cars produce low levels of NOx when driving on public roads.

While you wouldn't want to be stuck in a sealed room with a petrol car running, their exhaust gases are cleaner and have fewer harmful pollutants.

 

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