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Petrol vs. Diesel: How Car Fuel Affects Your Car Insurance Premium?

Understand the impact of petrol and diesel engines on the car insurance premium and it will help you to understand the things that you should consider at the time of purchasing a car.

  • 07 Nov 2022
  • min read
  • 62 views

Just as not all cars cost the same, all car insurance premiums also do not cost the same. Of the many factors that influence a car’s premium, one is the fuel type or variant of the car. Whether your car is a petrol or diesel variant affects the cost of car insurance premiums. Wondering why? The reason is simple. The car fuel type impacts many other factors that have a direct influence on the insurance cost. Some of those factors are:

1) Cost of the vehicle

The cost of the vehicle is important in determining insurance premiums. A diesel car is often priced higher as compared to its petrol counterpart. Since the price of a car is directly related to the cost of its insurance, the higher the price of a car the higher will be the insurance charge. You will find this when you compare the online car insurance cost for diesel and petrol cars.

2) Cost of repair

Cost of repair can have an impact on the insurance premium charged. Typically, a car with a diesel engine involves a higher cost of maintenance over the years. So, insurance companies tend to charge a higher premium for cars with a diesel engines when compared to their petrol counterpart. The same is also true for high-end cars and cars with expensive spare parts.

3) Insurance Declared Value or IDV

It is the estimated market value of a vehicle and has a direct impact on the cost of insurance premiums. Since the cost of a vehicle with a diesel model is higher, its IDV will also be higher, thereby affecting the cost of insurance. The decrease in the IDV of a diesel car would be slower so the renewals would still be more expensive than that for petrol variants.

4) Engine capacity

The engine capacity of the vehicles can also influence the cost of insurance premiums for the cars.  Since the engine capacity of diesel-driven cars is it raises the parameters on which the cost of insurance is valued. On the other hand, petrol-driven cars have a comparatively lower level of engine capacity.

5) Fuel efficiency

One of the most important factors that must be considered while buying a car is its fuel efficiency. Petrol cars are best when it comes to achieving initial power but diesel cars run best in higher gears. In the long run, diesel cars seem to be more fuel-efficient than petrol cars.

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6) Resale value

Resale value is another important factor that helps an individual to decide whether to choose between petrol or diesel-driven cars. Typically, the resale value of cars with a diesel engines is higher since the rate of depreciation is lower in diesel cars as compared to petrol variants. However, it also depends on how well a car is maintained. A well-maintained petrol car can fetch a higher resale value compared to a heavily-used diesel variant.

7) Environmental factors

At present times, when environmental pollution is increasing rapidly, considering environmental factors before choosing a diesel or petrol-driven car is very important. Typically, diesel-driven cars produce less carbon dioxide but more pollutant particulate matter as compared to petrol-driven cars. The latter emits a lesser amount of particulate matter into the environment. Thus, while choosing between diesel or petrol cars, it is always better to go for petrol-driven cars considering their lesser environmental impact.

8) Noise

Petrol driven cars produce less noise due to a lesser amount of engine noise and cabin vibration. On the other hand, diesel-driven cars are noisier. Considering this, it will be better to choose cars that run on petroleum. This is one of the important differences between the two types of cars that can have a major impact on the insurance cost and increase the premium for the car insurance policy.

9) Mileage

Mileage is one of the most important factors and determines whether to go for a diesel or petrol model car. Typically, diesel model cars have greater mileage as compared to petrol model cars. This is because diesel cars don’t require a spark plug and have a higher compression. Hence, while considering the decision to choose between petrol and diesel car, diesel car seems to be more advantageous.

10) The average distance of travel

Average distance of travel is an important factor in determining the car variant you must choose. If you plan to use your car for short-distance travel, then a petrol variant would be ideal. However, if you travel long distances often, then diesel cars might prove more economical.

So, now you know the basic difference between the petrol and diesel variants of a car and how it impacts the insurance premium. Make your decision wisely and select the best insurance cover apt for your car.

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