Interesting comments on Diesel

Submitted: Friday, Apr 04, 2008 at 11:37
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Reply By: KSV. - Friday, Apr 04, 2008 at 12:02

Friday, Apr 04, 2008 at 12:02
No-one can convince me that diesel vehicle cheaper to operate then petrol. In particular if servicing everything somewhere else. Yes, there is some economy per km even considering diesel more expensive (heck, it is CHEAPER to produce, so why we paying more?!? Just because it cost more in Europe? Absurd). But this economy get easy killed by purchase price and significantly more costly service – not only oil need to be change more frequently, but also pumps/injectors need to be serviced periodically. So as for me it silly reason to buy diesel because it cheaper to run. I personally tick totally different boxes – longer range, easier availability of diesel in outback, more torque and overall better reliability an robustness. Thus I personally would advise anyone who do not service car by himself against diesel, unless there is genuine need for it (i.e. towing) and willingness to pay premium.

Cheers
Serg.
AnswerID: 296606

Follow Up By: Member - Mike DID - Friday, Apr 04, 2008 at 15:26

Friday, Apr 04, 2008 at 15:26
The trade-in price of a 4WD at 100,000km makes a Diesel MUCH cheaper to own from new !
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Follow Up By: KSV. - Friday, Apr 04, 2008 at 15:40

Friday, Apr 04, 2008 at 15:40
Say you right, then it automatically means that all burden will be pass to second buyer. Thus according to this logic buying diesel at 100K is total suicide and that is not what wisdom suggest. From another hand selling car at 100K NEVER was economically proven – car just run-in with plenty of live left (more then 50% for sure) and it is impossible to recover more then about 50% of money! Some contradictory here.

Cheers
Serg
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Follow Up By: Member - Matt M (ACT) - Friday, Apr 04, 2008 at 17:44

Friday, Apr 04, 2008 at 17:44
Serg,

You lost me with your logic there somewhere. What Mike is saying is that a diesel is (generally) more expensive to buy, but will hold its value better THROUGHOUT its life. Buying a new car is not an investment, they don't appreciate as a rule, but a diesel will appreciate less (even by 100,000 km and beyond).

Even the article referenced by Stephen says that yes, you do pay extra for diesel fuel, but it is still (assuming the price differential between diesel and ULP remains steady) more than repaid in increased economy.

Another point to note is the diesel vs ULP price comparison is often done against standard (91 octane) ULP. Have a look at the number of modern cars that recommend 95 or 98 octane to run on. Use of these premium fuels cuts the price gap to diesel even further.

As for servicing, have a look at the servicing schedule for a modern diesel engine. A VW Golf 2.0l TDI has a service (and oil change) interval of 15,000 km. Injectors? Well yes, but I just serviced injectors on a petrol Landcruiser and let me assure you that it ain't a cheap exercise.

Add to that increased engine life and they make a pretty sound investment.

Each to their own I suppose. But I think you will find that you are basing your assumptions on older less advanced diesels.

The time they are a changin'.

Matt.
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Follow Up By: wigger - Saturday, Apr 05, 2008 at 22:01

Saturday, Apr 05, 2008 at 22:01
Matt
Line 3. I think this should be " but a diesel will DEPRECIATE less"

Even if a Golf service interval is 15k, it would be very false economy not to be giving it an oil change at half this distance. Many manufacturers, such as Ford and Mazda, with their new hi tech European CRZ diesels stipulate that oil changes must be done every 5000 to comply with warranty conditions and this added cost negates any saving if people are buying to get a better fuel economy saving in the case of cars and 1.9 l Suzuki diesels.
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Follow Up By: Davo_60 - Saturday, Apr 05, 2008 at 22:10

Saturday, Apr 05, 2008 at 22:10
Wigger,

I have a golf diesel and the service interval is definitely 15k, no requirement to service more frequently. Having said this I tend to think the new petrol cars are probably a better thing (to drive) around town than the new diesels and the overall cost is very similar.
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FollowupID: 562938

Follow Up By: Member - Matt M (ACT) - Sunday, Apr 06, 2008 at 08:25

Sunday, Apr 06, 2008 at 08:25
Wigger,

Yes, thanks for the correction - depreciate it should be.

With regard to service intervals why should I not believe VW's engineers? They now (as with most European manufacturers) have a fair history with diesels in passenger cars and I have seen no evidence to suggest that the service intervals they arrive at would be wrong.

The fact that some Japanese manufacturers, who by and large are only just seriously taking up diesels in passenger cars, choose to 'play it safe' does not suggest to me that those who largely developed the technology are wrong about their product and its service requirements.

I understand that there is a majority of thinking which says change the oil in a diesel every 5000km regardless. Fair enough, but all I am suggesting is that technology moves on and if the manufacturer say 15,000km, then I so no evidence to doubt it.

Matt.
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Follow Up By: KSV. - Monday, Apr 07, 2008 at 08:39

Monday, Apr 07, 2008 at 08:39
Matt,

Firstly we have been discussed 4WD, not passenger cars and therefore your example not 100% valid. Secondly (and this is more important) even if depreciation of (say) diesel LC *IS* less in percentage representation it is actually more or as least the same in money representation. It is like “prestigious” cars (Merc, BMW etc) - everyone saying that they depreciate less, and it fairly true as long as one compare percentage of depreciation, but once it cane to compare money they loosing much more of it. Compare 25K Corolla with 100K BMW. Say in 3 years time corolla will cost half, while BMW 2/3. But that means that one lost 12.5K with Corola while another one lost 33.3K with BMW – more then initial purchase price of Corolla! Even if my example not 100% correct in dollars and percents, I think you got the picture. Diesel 4WD is my choice, but I still believe that costs of ownership of diesel 4WD is very similar to petrol one in long term (probably even higher if never do anything by yourself) and on short term (like came to the country, get car for 1 year, drive around and sell it after that) petrol definitely more sound due to much cheaper purchase price and much cheaper service.

Cheers
Serg
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Follow Up By: Member - Andrew (QLD) - Monday, Apr 07, 2008 at 09:00

Monday, Apr 07, 2008 at 09:00
For a fair comparison, one should be comparing a Petrol model to it's equivalent Diesel version......and to compare a Corolla to a BMW is chalk and cheese. Based on that statement a Hyundai Getz is a better value vehicle again.

Apples to apples, how do the Patrol Diesel v's Petrol, Pajero Diesel v's Petrol, Cruiser Diesel v's Petrol etc stack up?

Andrew
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FollowupID: 563138

Follow Up By: KSV. - Monday, Apr 07, 2008 at 14:50

Monday, Apr 07, 2008 at 14:50
I am not comparing BMW to Corolla as a such, but rather compare their depreciation behavior and IMHO it is quite valid comparison. I was trying to illustrate common misunderstanding that “prestige” cars (more expensive in general) depreciate less while they not. Problem is people forget to say “relatively”. As for LC petrol vs LC diesel I have stated my opinion – long term ownership on par if doing everything by your own, while in short-term ownership petrol easier on pocket.

Chers
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Follow Up By: Member - Matt M (ACT) - Monday, Apr 07, 2008 at 15:21

Monday, Apr 07, 2008 at 15:21
See which sells quicker a large petrol 4WD or a large diesel one.
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FollowupID: 563195

Follow Up By: Member - Andrew (QLD) - Monday, Apr 07, 2008 at 15:25

Monday, Apr 07, 2008 at 15:25
Depreciation is not directly related to the market cost and/or selling price rather it is a cost allocation over the life-cycle of the asset, usually as a percentage. Therefore the Beemer will depreciate less than the corolla. The actual values are irrelevant to some degree.

Now to work out if i am to buy a LC diesel or petrol.....hmmmm. :-)

Andrew
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FollowupID: 563198

Follow Up By: KSV. - Monday, Apr 07, 2008 at 15:33

Monday, Apr 07, 2008 at 15:33
Andrew,

Nope, I disagree that “The actual values are irrelevant to some degree”. It is very relevant to total cost of ownership. Obviously in this example total cost of BMW is significantly higher then Corolla (what else anyone can expect?!?). It is not up to me however to stipulate if it is worth such extra for a particular person for “luxury” or “prestige” – it is up to everyone decide to him(her)self :-).

Cheers
Serg

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FollowupID: 563203

Follow Up By: Member - Andrew (QLD) - Monday, Apr 07, 2008 at 15:56

Monday, Apr 07, 2008 at 15:56
They are mainly irrelevant when considering depreciation......your analogy is flawed if you don't believe the Getz is better value. (not necessarily the best drivability, power etc).

TCoO is not the same as depreciation.....Google these terms

Andrew

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FollowupID: 563208

Follow Up By: KSV. - Tuesday, Apr 08, 2008 at 09:02

Tuesday, Apr 08, 2008 at 09:02
“Google these terms”

Thanks – do not need. My wife is an accountant and my business partners is an accountant also. Plus I been doing reports for accountants for more then decade, thus I do not need to Google term “depreciation”. You mix terms “better value for money” that is widely subjective (hey, how much “prestige” worth) and “cheaper to operate” that is quite objective. Getz cheaper to operate (i.e. TcoO lower)– no question asked. Is it better value for money in *MY* eyes then Corolla? As for me not, but for some yes. Is hi-spec Camry better value for money then BMW? In my eyes absolutely, but many disagree. Is BMW depreciate less then Getz? In relative terms (percentage) yes, but in absolute terms (money) no and this is also objective reality.

Cheers.
Serg
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FollowupID: 563345

Follow Up By: Member - Andrew (QLD) - Tuesday, Apr 08, 2008 at 09:29

Tuesday, Apr 08, 2008 at 09:29
Not at all Serg. You used the Corolla/Beemer example, i just stated that a sub $15K vehicle would be better again, a bicycle better again, walking even better.....that anology of yours ends up with one of the cheapest vehicle being the best.....NOT what we were talking about at all. I wasn't talking about best value for money, you were!

With Depreciation, it is normal to compare percentages rather than values. I think you'll find that the original question/statement was not comparing costs of vehicle, rather the relative costs of Petrol vs Diesel.

As mentioned before, you are not comparing apples to apples and there-in lies the issue.

Andrew
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FollowupID: 563355

Follow Up By: KSV. - Tuesday, Apr 08, 2008 at 10:09

Tuesday, Apr 08, 2008 at 10:09
Yep, sub 15K would be better in terms of money – i.e. cheaper to operate and this was original question. Not safer, not faster, not more comfortable, but cheaper. And again value for money is quite subjective indeed because what is value for one not necessarily value for another. For example majority feel that auto-transmission is superior to manual and for them is no-brainer if they cost the same. I would not pay more for auto, but I would pay more for manual! And I am comparing apple to apple indeed – i.e. dollars to dollars. Percentage can be very deceptive and misleading and need to be treated with care. Accountants use both percentage and monetary depreciation. With cars it is more common use percentage because usually more expensive cars depreciate relatively less and this is very good bait to fool customer and sell them more expensive car.

Cheers
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FollowupID: 563366

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