Study Finds Diesel Vehicles Offer Better Value Than Gas Vehicles

By (Display Name not set) January 27, 2011

2011-Audi-A3-TDI.jpgSlow and steady not only wins the race, but also helps the pocketbook.

Right, the 2011 Audi A3 TDI.

That's the crux of a report released this week by Carnegie Mellon University's Tepper School of Business on what kind of return on investment buyers of diesel-powered cars will get compared to their gas-vehicle-driving counterparts.

Between better fuel economy and lower maintenance costs, diesel-vehicle owners may recoup the higher cost of a diesel vehicle within 18 months, according to the report, which was underwritten by Bosch.

As a result, diesel-powered cars' residual values, on average, are as much as 30% more than cars powered by traditional port-fuel injection engines, according to the 40-page report, which used data comparing resale prices of diesel- and gas-powered versions of the Volkswagen Jetta and Mercedes-Benz E-Class as well as a handful of trucks.
And while diesel cars on average get about 30% better fuel economy than gas-powered cars, most of the premium in residual value stems from other factors such as lower repair and maintenance costs and expectations of a longer vehicle lifetime.

"It's been generally known that diesel vehicles typically post lower operating costs because of their increased fuel economy," said Lester Lave, Tepper Business School Professor of Economics, in a statement. "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."

Bosch funded the report and benefits from its findings, as the German company makes injection systems for clean-diesel engines.

That said, the report's argument is one that that American consumers, many of whom had associated diesel with the slower, louder, smokier General Motors and VW diesels of the 1970s and '80s, appear to be ready to take seriously as gas prices continue to rise.

Automakers will sell about 545,000 diesel-powered light vehicles to North America in 2016, up from 167,000 in 2009, with German automakers Volkswagen and BMW leading the way, Frost & Sullivan said in September.

More specifically, Audi, which sells both four-cylinder gas and diesel engines of its A3 hatchback, bet that U.S. customers may be willing to pay the extra $3,000 for the diesel version that gets about 10 miles per gallon more than the gas version but has about 60 fewer horsepower.

The German automaker bet right as the A3 TDI outsells its gas-powered counterpart by about a three-to-two margin, Audi of America's Brad Stertz said in a Los Angeles panel discussion last October.

Stertz added that Audi will likely start selling at least two new clean-diesel models in the U.S. during the next couple years.

Meanwhile, a Mercedes-Benz spokesman this week confirmed that the automaker would broaden its diesel-powered choices in the U.S. to six models from four by the end of the year.

Danny King, Contributor

Related Posts Plugin for WordPress, Blogger...


No HTML or javascript allowed. URLs will not be hyperlinked.