Diesel cars- being smart

Every channel that you turn to has advertisements about how diesel cars will save you money due to lower fuel costs. In fact one advertisement actually says " home loans increasing, inflation higher, education costs increasing , but fuel costs reducing "

There is a huge gap in diesel costs and petrol costs at fuel pumps.. Almost half.

Does it make sense to buy a diesel car in lieu of a petrol car? Absolutely!
Here are a few reasons.
The government will never deregulate diesel prices. If it does , the impact on inflation will be 100%! Today, the farmers and cars that run on diesel get subsidised fuel and there is actually no means by which we can have a differential pricing mechanism in place for self owned cars and transport companies.
The government actually thought of trying to get something like this done , however dropped the idea because of feasibility issues .
The reason is because if something like this ever happened, it would open up and easy black Market where anyway we are kings as Indians . .. Jugad laga lenge

since the cost differential is so high, and expected to continue to go higher.. The difference in additional costs to maintain a diesel vehicle , or the higher initial upfront amount dissapears in a years time. After that it's money back into your pockets!

Even the second hand cars resale value has become inflated. Again money back into your pocket!


So in the short term the government of India has gotten itself into a bind - and no way to get out either.

So go ahead get a diesel car- beat inflation

However , how can I end a note with no options to solve such a problem. Here are some things that the government can do


1. Increase the duties and sales tax on diesel vehicles so that the higher upfront costs deter people from buying them for personal use.

2. Increase road tax for diesel vehicles . Get some of that money back into the central government kitty by some financial mechanism ( remember road tax is a state subject )

3 increase income tax on companies basis the number of units sold on diesel vehicles


So , I hope the government is listening and reading this post for the ideas above ( they are smart people). The sudden shift needs to be corrected and fast.

However , all of this will take time. The government machinery turns slowly . Until then, if you are planning to buy a vehicle- go for diesel. Lock in your profits!!

Smart investing