Petrol Vs Diesel: How Car Fuel Affects Your Car Insurance Premium

There was a time when cars used to run primarily on petrol, while diesel vehicles were limited to trucks, buses and other commercial vehicles. With time and need things evolve and thus automobile manufacturers started producing diesel cars, which became equally popular as petrol variants.  And now, the automobile industry gets introduced to new versions of both petrol and diesel cars that manufacturers are releasing every year.

Car Insurance Policy and Car Type

There are many differences between petrol and diesel cars.  But do you know if the fuel type of your car also influences your car insurance policy? Yes, most of them do because the premium of a car insurance policy offered by different insurers varies as per the fuel type of a car along with numerous other features.

As such, having car insurance is mandatory for every car owner in India. So, withstanding the fact whether you have a petrol, diesel or electric car, you must buy a car insurance policy for the vehicle to drive safely on the Indian roads. Further, having comprehensive car insurance is regarded as a great protection against a number of car related issues and damages. Thus, it is important to keep renewing your car insurance online every year so that the policy remains active and you keep receiving the benefits of the plan along with other features. For your convenience, you can use a car insurance renewal premium calculator to calculate the insurance premium of your car at the time of renewal.

Car Insurance – Petrol Vs Diesel – Factors Influence the Premiums

So, coming back to whether a car insurance policy is influenced by the fuel type of a car, following are the two factors which primarily impact the car insurance premium

1. Engine type 

When it comes to engines, the cost of cars with diesel engines are usually more as compared to cars with petrol engines. This results in higher IDV or Insured Declared Value of diesel cars. Thereby, it affects its premium price because the higher the price of a vehicle the higher the premium you pay.

2. Maintenance 

Also, as the expenses of repairing cars powered by diesel is more, the insurer charges a higher premium on your diesel-powered vehicles.

Below are some points that you may consider while choosing a petrol vs. diesel engine car:

As mentioned earlier, there are many other aspects that determine your car insurance policy besides fuel. These aspects also determine your decision to purchase a car – a petrol vs. a diesel car.  Some of these points are mentioned below:

• Prices of fuel in the area you live – Depending on the part of the world you live in, the prices of fuel varies. In India also, depending on the state you live in, you might find variations in petrol and diesel prices. However, generally diesel is a little cheaper as compared to petrol. Thus, many people like to choose diesel powered cars for their cost effectiveness as compared to petrol ones.
• How efficient is the fuel – In terms of efficiency and mileage, a car powered by petrol allows higher mileage as compared to diesel cars, especially for short distances. On the other hand, when it comes to long routes diesel cars serve the purpose well. Thus, it also depends on your daily commute range to choose between a petrol or diesel engine car.
• Cost of car maintenance –  Earlier, diesel-powered cars were more costly to maintain as they were meager in number and not that popular. However, at present with the availability of diesel cars in large numbers, their maintenance is no more a cause of concern. Thus, their maintenance cost is almost equal to that of petrol cars.
• The resale value of your vehicle –  It is important to note that second hand diesel vehicles fetch a higher price on resale as compared to petrol run cars.

Some other Factors to Consider

• The insurance plan you seek –  Comprehensive car insurance plans are more expensive as compared to third-party insurance plans as the comprehensive plans allow extensive coverage than the basic third-party covers. It also influences your car insurance premium.
• Add-On Cover – If you buy add-on covers or riders with your comprehensive car insurance plan, it will further increase your insurance premium. However, these add-ons might be beneficial in the long run in case your car endures any damage requiring extra cost to manage them.
• The area you live in – The place you live in or your physical location also determines your car insurance premium. People living in cities need to pay more premium as compared to those living in small towns.
• Installing anti-theft devices – If you have anti-theft devices in your car to provide security to the vehicle from theft, it also lowers the premium of your car insurance. This is because in such a case your car will have less risk of getting stolen.
• IDV – The IDV or Insured Declared Value of your car, which is its market price, impacts the premium of your car directly. Thus, make sure to set the proper IDV amount to benefit in the long run.