Car manufacturing brands are no longer restricting themselves to the production of petrol-driven cars and are making diesel-powered cars in great numbers too.
With innovation and development in science and technology, the drawbacks of a diesel car have been washed away making it a viable choice for potential purchasers. Diesel is not the niche fuel of heavy-duty trucks and is used by manufacturers of cars too.
Importance of Having a Car Insurance Policy
Besides the fact that a car insurance policy is a mandate of law under the Motor Vehicles Act, 1988, there are several other reasons that nudge a car owner to buy a car insurance policy. The advantages are -
- Financial security to the policyholder.
- Protects one from unforeseen financial burdens by offsetting losses of huge sums of money.
- Prevents one from running into legal hassles. It also covers suits and legal fees that one might incur in the event of an accident.
- Allows one to drive on the roads legally.
- Covers for damages beyond third-party damages, to own damages to the safety of passengers depending on the policy cover.
- Offers death benefit to the family.
- Assured repairs and replacement to damaged parts of the car.
- Compensation in case of theft, natural disasters, etc.
Impact of the Type of Fuel on Car Insurance Premium
Car insurance premium for diesel cars is slightly higher than that of petrol. On average, there is about a 10% – 15% difference between the premiums of petrol and diesel cars. The reasons why it is so is indicated below -
- The cost of a car running on a diesel engine is slightly more than a petrol-driven car. But it is important to remember that diesel cars last longer and depreciate more slowly than their petrol variant. Also, cars powered by diesel engines deliver superior mileage to petrol cars.
- The cost of repair of diesel-powered cars is higher across all segments.
- The engine capacity of the car also influences the premium rates. The same can be seen on a comparative basis in the table given below -
|Vehicle CC||Fixed third-party premium for petrol cars||Fixed third-party premium for diesel cars|
|Not exceeding 1000 cc||INR 2,072||INR 2,093|
|Exceeding 1000 cc but not exceeding 1500 cc||INR 3,211||INR 3,243|
|Exceeding 1500 cc||INR 7,890||INR 7,968|
What are the Other Factors That can Affect the Premium?
- Type of insurance plan – for example, a comprehensive insurance cover with add-ons will be more expensive than simple third-party car insurance.
- Location – for example, the cost of a policy is higher in a metro city like Delhi or Bangalore as compared to tier 2 or 3 cities like Agra.
- Anti-theft device – enables the policyholder to get a good discount on the policy provided the device is purchased from an authorised seller such as the Automotive Research Association of India (ARAI).
- Insured Declared Value (IDV) – this market value of the car plays a very important role in determining the premium values. Ensure that this is fixed closest to the market rate to get the optimum benefits.
Things to Consider While Choosing Between Petrol and Diesel-powered Car
- The current price of the fuels in your locality is an important consideration as the prices of both diesel and petrol vary from place to place.
- Fuel efficiency must be kept in mind – mileage of petrol cars is more suited for short journeys and diesel cars for long journeys.
- Maintenance cost for both petrol and diesel cars is nearly the same, though earlier it was harder to maintain diesel cars. Such a distinction no longer exists.
- The resale value of your car is higher for diesel as opposed to petrol cars. If one is prone to changing their cars regularly, then it makes more sense to opt-in for a diesel car in lieu of its resale value.
- Impact on the environment is more adverse for diesel cars than for petrol-driven cars. But if the environment features are higher on one’s priority list then one must opt for other viable alternatives like electric cars or public transport.
After perusing the information given, one might discern that a diesel car is more expensive to insure as compared to a petrol-powered car. But the difference is not very high and is easily manageable. Higher insurance premiums must not be a reason to deter you from purchasing a diesel car that you have set your eyes on.
Rather, try and look out for other ways in which you can reduce your insurance premium. Also, make sure you assess all the pros and cons of both variants before you make your final decision. Purchasing a good comprehensive insurance policy with the necessary add-ons is something that one must consider.