Clean-Diesels Pay Off Big Time for Owners

Diesel-vehicle buyers in the U.S. can recoup the premium they pay for their oil-burners in less than 18 months, a new study by Carnegie Mellon University researchers finds.

The report reveals even though car buyers pay more for diesel-powered vehicles, their total cost of ownership is reduced because of improved fuel economy and higher residual values at trade-in.

The study was released at the recent Washington International Auto Show on the 75th anniversary of the diesel engine’s debut and was funded by Robert Bosch LLC.
Since clean diesels debuted 18 months ago, the take rate has increased from 5 percent to more than 30 percent, says Lars Ulrich, director-marketing for Bosch Diesel Systems.

“In medium-duty trucks like the Dodge Ram, it’s over 90 percent. In the Volkswagen Jetta, it’s 50 percent, and the average is 30 percent,” Ulrich stated.

Despite the fact clean diesel tax-credit incentives have expired, there has been no indication of a drop in diesel-vehicle sales, he says, noting perhaps consumers are convinced there are other reasons to buy diesels.
“This makes me optimistic for future growth of diesel sales. Diesel engines pay off much quicker than we previously assumed.”

Ulrich claims that over a three-year period owners of diesel-powered sport utility vehicles and crossover vehicles can save $3,600, compared with conventional gasoline-fueled equivalents.

“It’s been generally known that diesel vehicles typically post lower operating costs because of their increased fuel economy,” says Lester Lave, professor of economics at Carnegie Mellon’s Tepper School of Business, who supervised the study.

“But that’s only one element of the equation. Our study considered a vehicle’s initial price and resale value, along with other operating and maintenance costs,” he says.
Lave’s team used Mannheim Auctions data, as well as data from wholesale-vehicle-operator Cox Enterprises Inc., to compare actual resale prices of diesel and gasoline vehicles. They also compared resale prices, along with the total cost of owning and operating diesel and gasoline-fueled cars and light-duty trucks.

Lave says Bosch, which makes clean diesel fuel-injection systems for cars, light-duty trucks and commercial vehicles, sponsored the study because it wanted an independent evaluation of the data.

The study also reveals both Volkswagen’s clean-diesel vehicles and the Toyota Prius hybrid have greater residuals than conventional gasoline-fueled vehicles.
Additionally, the researchers conclude that as trucks’ interior space grows, the more likely the vehicles are to be purchased with diesels, noting the bigger diesel trucks have higher residuals than the equivalent gasoline models.

A diesel vehicle’s resale price at five years justifies the higher initial premium price, the researchers conclude, noting a rational consumer will choose the vehicle with the lowest total cost of ownership — an area where diesels stand out.

Recently, I’ve driven a number of diesel-powered cars and cross utility vehicles, including the BMW X5, BMW 335, Mercedes E-Class BlueTEC and Audi A3. My conclusion is that the experience of driving a diesel vs. a gasoline-fueled vehicle is virtually unnoticeable today. And stopping at the fill-up service station one-third less often is quite a bonus. — Herb Shuldiner, Motor Matters

Manufacturer photo: The Ram’s available 6.7-liter Cummins Turbo Diesel produces 350 horsepower and 650 lb-ft. of torque. The 6.7-liter meets the most stringent of 50-state emission requirements and includes a segment-exclusive standard exhaust brake.

Copyright, AutoWriters Associates Inc., 2011

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