Diesels Save Fuel, But Do they Save Money?

Diesel-powered cars have a reputation for being loud, smelly and slow, but they also get very good highway fuel economy. However, just because diesels save fuel doesn't mean they always save their owners money.

85 percent of Jetta Sportwagen sales are of diesel models. Image courtesy Volkswagen

According to the Diesel Technology Forum, a non-profit that raises awareness of diesel engines,  diesel car registrations increased 24.3 percent between 2010 and 2012, even though car registrations overall only increased 2.75 percent during that time.
USA Today writes, "Every time we've driven a new diesel car lately, we've been amazed at how indistinguishable they have become from conventional gas cars. No clatter. No smoke. No rattling engine noise."
Doug Skorupski, Volkswagen's alternate fuels technical strategies manager, said in an interview that "Diesel engines are inherently more fuel-efficient than gasoline engines." That's because there's 14 percent more energy in a unit of diesel fuel than the same unit of gasoline. Volkswagen is a leading manufacturer of diesel passenger cars in the U.S. market. Twenty-one percent of Volkswagen models for sale in the U.S. are diesel.
According to Skorupski, diesel is "one of the few technologies where customer expectations are being met or exceeded." He cites the high fuel economy of diesel engines as one of the main reasons diesel owners are positive about their cars. In many cases, Skorupski says, diesel owners are able to far exceed EPA fuel economy estimates. That's because fuel economy tests are conducted at 55 miles per hour. In a gasoline engine, as speed increases, fuel efficiency drops off. However, because diesel engines have higher compression ratios, they don't experience the same drop-off in efficiency as gasoline engines. Skorupski also says that because diesel engines use less fuel, they have fewer carbon emissions.
Volkswagen has good reason to tout the benefits of diesel engines. The automaker reports that 72 percent of all diesel passenger car sales in the U.S. in 2012 were Volkswagens. When diesel sales from Volkswagen's sister brands of Audi and Porsche are added in, the company accounted for 80 percent of diesel sales in the U.S. in 2012, Skorupski says. "We are the market, no question about it," he says.
Diesel vehicles typically cost more than their gasoline counterparts, and the higher cost of diesel fuel can make it seem like a diesel car will cost more in the long run. Volkswagen says that 85 percent of sales of the Jetta SportWagen are of the diesel model. Based on highway mileage alone, it would take 16,091 miles of driving to break even on the diesel Jetta SportWagen's $1,400 price premium. Twenty percent of Jetta sales are diesel models; the Jetta diesel has a $4,040 price premium over a comparably equipped gasoline-powered Jetta. That means that based on highway driving alone, it would take 46,436 miles of driving to break even on the price different. That's better than the break-even period on the Jetta hybrid, however, which would take 96,200 miles of city driving or 110,763 miles of highway driving to make up its $7,975 price difference with the gas-only Jetta.
If you do a lot of highway driving, a diesel car can save on fuel eventually, but that doesn't mean a diesel will be cheaper to own in the long run. A 2012 analysis by Vincentric, a company that provides cost of ownership data, looked at 23 diesel models and found that only nine had lower total ownership costs than their related gasoline models. According to Vincentric, the diesel models cost more to own because "the diesel vehicle had a higher market price than its gas alternative, which causes several cost factors to increase including depreciation, finance, opportunity costs and fees and taxes. The 2012 study also shows that diesels typically have slightly higher insurance, repair and maintenance costs."
Purchasing a diesel car, truck or SUV can be a great way to save fuel, especially if you do most of your driving on the highway. As you do your shopping, however, make sure you factor in the added costs of owning a diesel to get a full picture of how the diesel vehicle will fit into your budget.