Q. Which car to buy a Diesel or Petrol Hyundai i30 ?
A reader posted a comment on the Diesel vs Petrol article and I thought I’d make a post out of it.
Their dilemma was whether he should purchase a Diesel or Petrol Hyundai i30 (financed using a car lease).
There are a number of factors that can determine which option would be best for you. For example, the lease arrangement that you have negotiated (such as the lease residual/balloon amount), whether you can claim all of your car expenses as a tax deduction etc. I’m not the most savvy when it comes to car leases, so let’s look at the other factors that should be considered such as depreciation, running costs and your estimated total ownership period. I’ve assumed that after the lease period, the kilometres clocked will be equal to that of an average Australian of 15,000 per year.
Depreciation (after 2 years of ownership):
| Car Option 1: Hyundai i30 Active Petrol Auto | Option 1: Hyundai i30 Active Diesel Auto |
| Original Purchase Price: $22,990 | Original Purchase Price: $25,590 |
| Approx resale % (after 2 years): 76% | Approx resale % (after 2 years): 74% |
| Estimated worth of car (end of lease): $17,472 | Estimated worth of car (end of lease): $18,936 |
Summary:
Petrol pros:
- Lower lease amount and smaller monthly (lease) repayments
- Even though depreciates less, balloon payment at the end of the lease is less ($17,472 vs. $18,936)
Diesel pros:
- Estimated to depreciate 2% more than the petrol: diesel will be slightly better value to buy outright at the of the 2 year lease.
Running Costs:
| Car Option 1: Hyundai i30 Active Petrol Auto | Option 1: Hyundai i30 Active Diesel Auto |
|
Fuel |
|
| Fuel Consumption (combined): 6.9 l/100km | Fuel Consumption (combined): 5.6 l/100km |
| Fuel Consumption (urban): 9.7 l/100km | Fuel Consumption (urban): 7.5 l/100km |
| Total cost over first 2 years (approx):Fuel Used: 4,365 litresFuel Cost: 4,365 x $1.40 per litre** = $6,111 | Total cost over first 2 years (approx):Fuel Used: 3,375 litresFuel Cost: 3,375 x $1.48 per litre** = $4,995 |
| Total cost over years 3 and 4 (approx):Fuel Used: 1455 litresFuel Cost: 1,445 x $1.40 per litre** = $2,023 | Total cost over years 3 and 4 (approx):Fuel Used: 1125 litresFuel Cost: 1,125 x $1.48 per litre** = $1,665 |
|
Servicing |
|
| Service Cost (Capped Price Servicing*):$219 | Service Cost (Capped Price Servicing*):$289 |
| Total service cost over first 2 years (approx):6 services @ $219 per service = $1314 | Total service cost over first 2 years (approx):6 services @ $289 per service = $1,734 |
| Total cost over years 3 and 4 (approx):2 services @ $219 per service = $438 | Total cost over years 3 and 4 (approx):2 services @ $289 per service = $578 |
|
Total Running Costs |
|
| Total Running Costs (over 2 years): $6,111 + $1,314 = $7,425 | Total Running Costs (over 2 years): $4,995 + $1,734 = $6,729 |
| Total Running Costs (over years 3 + 4): $2,023 + $438 = $2,461 | Total Running Costs (over years 3 + 4): $1,665 + $578 = $2,243 |
Note that the fuel costs calculated was based on the urban (suburban) consumption figure (which more accurately reflects the future use of your car) at 45,000 km per year.
*if car purchased after August 1 2012 (at 15,000, 30,000 and 45,000 km)
**Average Prices (in Melbourne):
Petrol: 140 cents per litre (rounded down)
Diesel: 148 cents per litre (rounded down)
Summary:
Petrol pros:
—
Diesel pros:
- Diesel will cost less to run over the first 2 years by $696, but difference in costs reduced drastically in years 3 and 4 due to reduced kilometres travelled during this time ( to $218)
Looking at the above figures and on first pass, it appears that the diesel is the better proposition during the first 2 years of ownership. However, you must remember that your monthly lease payments for your diesel will be more (as the original purchase price is $2,500 more). If you find that the monthly lease repayment for the diesel is greater than the savings in the running costs (per month), then the petrol is the better proposition.
Now consideration over the longer term – years 3-6 for example – is required. The diesel will continue to depreciate at a greater rate than the petrol. The slightly less expense in running costs of the diesel will be more than consumed by the losses in depreciation. So over this ownership period, the petrol variant would be the preference (however this advantage will only be realized after the car is sold).
If the ownership period is 6+ years, or rather 10+ years, then the diesel would be the way to go. Once cars reach 10+ years old, there would be little difference in the value of the car between the two. Sure, you would have lost more money if you had purchased the diesel as the car cost you more initially. However, over the 10+ year ownership period, the diesel should provide you with more trouble-free motoring as they are well regarded as having a longer lifespan than a petrol engine.