Petrol vs Diesel: How Car Fuel Affects your Car Insurance Premiums?

Both diesel and petrol have their pros and cons and it is up to you to choose one that best suits you. In this article, we will discuss the impact of petrol and diesel engines on the premium of car insurance and help you to understand the things that you should consider at the time of purchasing a petrol-powered or diesel-powered car.

Brief Introduction of Car Insurance Policy

Whether you own a petrol car, diesel car, or an electric one, it is compulsory to buy a vehicle insurance policy. A policy provides financial cushioning in various unwanted situations like unfortunate incidents related to the car. Your car insurance provider settles the claim as per the coverage of your car insurance policy and policy’s terms and conditions.

Driving a car without insurance is against the law, so you not only have to remember to have a car insurance policy when purchasing a car instead you have to renew it before your existing plan expires. There is no point in driving a car without an insurance policy as it may lead to legal issues. So, you can either purchase third-party insurance or a comprehensive car insurance plan.

On one hand, where a third-party policy provides cover against any damage or loss to third-party, a comprehensive cover, on the other hand, provides third-party cover as well as cover for your car's damage in any car-related incident.

Petrol, Diesel, and Car Insurance

Mentioned below are some points that will explain the relationship between diesel-driven/ petrol-driven cars and an insurance policy for the car. Keep in mind that these are some of the generic points and may vary with make and model of a car. However, these points for sure will guide you in making the correct decision:

• Cost of the Car: The cost of cars that have a diesel engine is generally higher than petrol-driven cars. The price of the vehicle has a direct impact on its insurance. Higher the cost of the vehicle, higher would be its premium.
• Cost of Repair: The cost of repair of diesel-powered cars is higher, therefore, the companies are charging a higher premium for diesel operated cars. This fact is also true for the cars of high-end and those that have expensive spare parts.
• Other Factors That Are Affecting the Premium of Car Insurance: The cost of the vehicle is not the only factor that determines the premium of its insurance. There are many other factors as well that decide the amount of premium that your insurance provider may charge. Following are some factors that are considered, apart from petrol or diesel:
  • Type of Insurance Plan: Purchasing a comprehensive car insurance policy costs more than purchasing third-party liability cover. In addition to this, if you have chosen to add riders in your plan then your premium will again increase.
  • Location: The city or location of your resident as well plays a major role in deciding the premium of your car insurance policy. The cost of your car insurance policy is more if you are living in a metro city and it is lesser when you stay in a tier 3 city.
  • Anti-Theft Device: An anti-theft device designed in a way that it prevents your car from theft. If you install one such device in your car, then your insurance provider will give a discount on the car insurance premium. Do take this precaution by installing an anti-theft device in your car and taking an anti-theft device certificate by the Automotive Research Association of India.
  • Insured Declared Value (IDV): This is an approximate market value of your car. The Insured Declared Value (IDV) has nothing to do with the resale value of the car, instead best car insurance in India provides potential policyholders an option to select IDV of their car from a given range. Lower the IDV of your car, lower will be its insurance premium, and higher the IDV of your car, higher will be its premium.

Diesel vs Petrol – Some Important Points to Consider

Apart from the impact of the fuel on the premium of your car insurance, your decision of buying a petrol or diesel car can also be made as per the following points:

• Prevalent Price of Fuel in The Location Where You Live: The price of fuel, which is diesel or petrol is not constant throughout the country. It is different and varies from one Indian state to another. Moreover, the cost of fuel also fluctuates from time to time. However, diesel is relatively cheaper than petrol, in general. If you are sensitive in fuel spending, then you should opt for a diesel-operated car.
• Fuel Efficiency: The mileage of a petrol operated car is more for short journeys, whereas diesel is considered better for long routes. So, based on your daily commuting, you can opt for a petrol operated car or diesel one.
• Car Maintenance Cost: Diesel was less refined sometimes back. So, the maintenance cost of diesel-driven cars was more. Now, the maintenance is not a big issue because the cost of regular maintenance of a diesel-driven car and petrol driven car is almost the same.
• Your Vehicle’s Resale Value: There are two types of people while we talk about cars – one who changes car regularly, and one who stay committed to one car for a long time. If you are the one who belongs to the first category, then you must know that diesel cars get more money than cars which use petrol when they are sold as second hand.
• Environment’s Impact: Diesel is considered as less friendly with the environment than petrol. However, both types of fuel hurt the environment. In current times, when a change of climate is a major concern and serious threat, you should be conscious of the environment, especially when we talk about vehicles. If the saving environment is your concern, then you may choose an electric car instead of diesel or petrol-driven cars.

Summing it Up!

So, it is entirely your decision whether you should purchase a petrol car or a diesel car, but keeping the above points in mind can let you make a better decision. On the one hand, where diesel cars have a higher premium for car insurance than petrol ones, the other hand, they give more mileage when you have to drive a long distance every day.