Is diesel really worth it?

October 8th, 2008

2009 VW Jetta TDI

2009 VW Jetta TDI

Diesel fuel has been getting a lot of attention lately.

Bloggers all over the ‘net are claiming it’s the answer to slowing our oil consumption and raving about the high mileage diesel cars get. After all, Europe has been driving diesel cars for years yet American has been slow to get on the band wagon.

Cargurus.com even did a recent poll on this topic, with a majority of people who plan on buying an alternative fuel car saying they’ll buy diesel over hybrid.

While it’s true that diesels get 20 to 30 percent better fuel economy, diesel fuel is about 50 cents per gallon more than gas. On top of the higher fuel costs, diesel autos cost more upfront to buy.

I’m going to do the math right here and now, to see if going diesel on your next new auto purchase is financially worth it over a traditional gas-powered car.

The cargurus.com survey cited the 2009 Volkswagen Jetta TDI (diesel) as it’s example, so I’ll compare it to a similarly equipped 2009 Jetta SE (gas).

The SE costs $19,920. The TDI is $21,990 for a difference of $2,070.

Currently, gas costs an average of $3.48 per gallon. Diesel currently averages $4.00 per gallon.

The SE gets an estimated 20 MPG in the city. The TDI gets 29 MPG.

Assuming you drive an average of 15,000 miles per year in the city, you’ll use 750 gallons of gas in the SE for a total of $2,610 in fuel costs.

In the TDI, you’ll use 517 gallons of diesel, for a total of $2,068 in annual fuel costs.

With the TDI, you’re saving $542 per year in fuel costs. At current prices, it will take driving your TDI for almost 4 years to break even.

So the bottom line is simple: If you’re buying a diesel over a gas-powered car to keep for the long run, diesel is a good option.

I’m interested in what you think: Is diesel worth the higher MPG? I only looked at the financials; what are some other reasons to go diesel?

-tgriffith

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  1. | #1

    I’m curious to know how many people trade in their car before 4 years. I’m assuming the majority of people don’t, which would make buying the diesel more cost efficient.

    If you live in the city it probably wouldn’t make a lot of sense to buy a diesel, since you probably do way less than 15,000 a year.

  2. Kyle L.
    | #2

    My wife and I don’t drive much (we luckily have many public transportation options) and we do tend to hold on to cars for many years. Even if we did hold on to our diesel car for 10 years, I have to wonder how much more money we would keep in our pocket by investing that difference in the stock market or a mutual fund… though lately with how the economy is doing, I’d probably loose it all ;). Hmmm… maybe I should invest in Diesel!

  3. Ian S
    | #3

    In the UK, annual Road Fund Tax is calculated by the amount of CO2 your car emits. Diesel cars emit considerably less than petrol (gas). Even with a larger more powerful diesel engine the savings are quite considerable. For example a typical 2.5 Petrol engine will come into the tax band of £440 per year (approx $800) where as a new Jaguar Diesel only costs £160 per year (approx $300).

    So in the UK at least, it makes good financial sense to buy diesel. We have recently been hitting nearly £6 a gallon in the UK too ($10) so you can see why we want as many miles as possible for our money.

    Finally, the residual values and service intervals of diesels in Europe are generally higher than petrols

  4. Seppo
    | #4

    I currently drive a 2006 VW Jetta TDI approximately 32,000 miles annually, and averaged 47 mpg until I replaced the OEM tires. With the new, grippier tires my average immediately dropped to a bit below 45 mpg.

    With a busy life and long commute, my time is important to me. Filling up with diesel every 550 to 600 miles sure beats stopping for a gasoline fill-up every 300 miles or so.

    Also, compared to the gasoline models I had considered from Honda, Subaru, etc. the VW has 10,000 mile service intervals. As this is my only car it is very inconvenient to drop off the car at my mechanic for routine service, and arrange alternative transportation for my long commute. The 10,000 mile service intervals are a huge advantage in that respect; they are more comprehensive and expensive than the shorter-interval services at the competing makes, but at one-half to one-third as many I will gladly live with that.

    Diesel fuel has during my ownership of this car increased from parity with regular-grade gasoline to a significant premium, but still outperforms because of the reduced consumption.

    And, should I need to sell my car, the resale value is quite impressive.

  5. | #5

    Other reasons?
    Well, apart of fuel economy and car longevity, let’s not forget that TDI means a turbo-compressor that will significantly increase the torque produced without threatening the longevity of an engine, because diesels are built naturally sturdy. Another positive points is that the direct injection reduces noise and the amount pollutants in addition to increasing efficiency and driving pleasure.

  6. Wain Chang
    | #6

    We just purchased a 2009 Jetta TDI, so far we have put 1500 Miles in one month so I think we’re on track to 15K a year. The TDI has a premium sticker price of aprox $2000 over the gas engine, however at this point we do qualify for the Government $1300 Credit + our saving of about $700 in fuel per year. We’re on target to recuperate our premium the first year, to see a real saving on fuel we must drive conservative, on this car you get two options you can have fan and drive it hard or be gentle on the pedal and reap the fuel savings after all it’s your car your money, by the way the 2009 comes with 3 years or 36K factory maintenance which equals to 3 oil changes big deal. by the way we’re paying about $2.85 Per gallon in the Los Angeles suburbs. For those not familiar with diesel technology Diesel is not flammable so in the event of a bad accident the risk of fire is very little or non-existent, unlike it’s evil brother the gasoline one.

  7. joe
    | #7

    the tdi gas mileage is actually higher that you mentioned, and don’t forget the tax credit

  8. Will
    | #8

    Well things have changed since the last post…Now its Nov of 2009 and gas (regular) is about 2.80/gal and diesel is about 2.99/gal here in the Northeast. So having driven 34,000 miles last year in a Honda Accord getting ~26 MPG combined…Lets do the math: 34000 miles/ 26 mpg = ~1307 gals of gas @ $2.8 = $3661.53.
    NOW, one of my co-workers who owns a VW TDI is getting ~42 MPG combined. Highway is about 46.5 MPG. So lets compare. 34000 miles/42 MPG = 809 gals @ $2.99 = $2420.47

    So that would be a savings of about $1241 per year in fuel alone. So over the life of a five year loan thats a savings of about $6200. That more than pays for the upcharge for the diesel engine. Then the proven longevity of the diesel engines (usually noted for going ~300,000 miles) – if you can just choke down the timing belt changes every 80K miles and “special oil” VW mandates, it seems like its not that bad a deal…

    But hold on…What about those coming over the horizon…! Subaru Boxer diesel holds some promise. Even the Mahindra pick up truck getting no less than 30 MPG on the highway.

    Then what about the diesel hybrids, like VW’s L1 thats supposed to get 230 MPG.
    Or the Aptera that they expect to get 300…

    Change is about to happen in the world of transportation.
    Now if I can get a few more miles out of my current ride so as to be ready for the wave…

  9. skeet
    | #9

    re:Diesel is not flammable so in the event of a bad accident the risk of fire is very little or non-existent, unlike it’s evil brother the gasoline one.- Wain Chang

    Diesel fuel is VERY flammable. I am not sure where you get your info, but I have personally used diesel fuel to set fire to many brush piles and I can assure you it is not something that needs help burning. It goes up almost like gasoline, not quite as explosive, but VERY flammable.

  10. | #10

    The numbers used for the VW TDI at 29 MPG are way off. I am driving my third VW TDI a 2004 Jetta Wagon. In all my VW TDIs i get 42 MPG city and 49 plus MPG on the highway. During the winter using winterized diesel that has less heat energy I routinely get 38 MPG in the city. Even and automatic TDI driven in winter will get more than 29 MPG city driving.
    1997 Passat TDI sedan, 2002 VW Jetta TDI wagon, 2004 VW Jetta TDI wagon

  11. | #11

    The 2004 models have smaller engines vs the 2009 That being said>

    My 2006 gets 36-37 mpg city and has 120K miles on it. Also the Jetta SE models don’t have rear disc like the TDI the TDI has the same suspension and trim options as the SEL not SE. This would drop the price difference and upping the EPA 29 to 36 would reduce payback time. I think the prem for TDI is 1300.00 not bad considering adding NAVI to most cars is $2,000 and my EVO phone has NAVI :D

  12. mike
    | #12

    We have a VW 2009 Jetta TDI Diesel and this is a awesome car. We continuously get 35-40mpg around town and about 45-48mpg on the highway. This has a 6speed manual transmission and wow is this fun to drive. Also the details, handling, power/pickup, quietness, and ride in this car are tremendous. I would say that we are getting a good return on the energy side. We keep cars for a LONG time and we will definitely keep this one 10years+ and make money on our fuel savings while enjoying driving this awesome car.

  13. Joel
    | #13

    My wife and I are shopping for a Jetta and were going to get the TDI. She drives 18-20,000 miles per years and plans to keep it for 10 years (up to 200,000 miles). The TDI sounds like an obvious choice, right? Well, lets look. The TDI is equiv to the SE with conv and sunroof package. The difference in MSRP is about $2600 at my local dealerships. Plus sales tax that is $2756. Now, financing with the TDI right now is 3.9%. The regular Jetta is 2.9%. These promotions change, but typically the TDI is a higher promotional rate than its counterpart. So this means extra finance charge…not to mention more upfront cost equals more money to finance which equals more interest overall. Even if you are buying in cash, there is an opportunity cost of outlaying more cash upfront. With all of that we are at about $3,000 more in cost to own a TDI. So far, it still seems to be an overall savings with the TDI when considering owning for 200,000 miles. Now, here is were many people might lose out. NEGOTIATION!!! We all know that car dealers can negotiate the price; however, good luck with the TDI. Why is that…supply and demand. Why VW doesn’t ship more TDIs is beyond me. But the simply fact is that most VW dealerships in the US have a 10:1 ratio of gas vs. TDI. It is a real shame, but my local dealerships will drop $1300 off of the SE and only $200 off the TDI. That brings the total increased cost of the TDI to $4,100. Plus, the TDI only comes with a sunroof according to my local dealerships. The SE can be purchased without a sunroof (which we don’t care to have), which knocks another $900 off the price. Now it would cost $5000 more for the TDI. The savings in gas is starting to become a mute point. The only other consideration is egine longevity and resale value for a TDI. Any thoughts on those two aspects? Is the TDI engine longevity really an issue over its gas counterparts? I mean won’t the parts around it still die even if the engine does not? Gas engines do last very long these days as well.

  14. koick
    | #14

    skeet, stop spreading misinformation! The flash point of diesel is 143F (62 C). http://en.wikipedia.org/wiki/Flash_point#Examples I have witnessed a guy throwing lit matches into a barrel of diesel with no effect!

  15. c.harris
    | #15

    what you failed to comment on is the high cost of maintenence with the TDI–40,000 mile DSG transmission change to the tune of 400.00–plus the 40,000 maintnence to the tune of $200.00.Plus my TDI 2010 JETTA SPORTWAGON so bad in snow–had to get snow tires

  16. Alaskapablo-half
    | #16

    In the winter, consider additional electrical expense when you plug in a block heater for several hours or overnight to ensure that your rig will even start. It’s also advisable to let it run for at least 5 minutes to get the oil and transmission fluid warm… ish. I wish I had a heated garage!

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