Listeners of the Car Pro Show already know this from listening.
A new study reveals that buyers shouldn’t let initial sticker shock dissuade them from buying a diesel model, according to the latest research. Following up on a study from 2013, the University of Michigan Transportation Research Institute continues to find that paying the extra money upfront for a diesel saves drivers cash over the long haul. When looking at three-to-five years of ownership, the diesels generally kept $2,000 to $7,000 in owners’ pockets.
The research was based on the results of auction sales in 2012 and 2013 for thousands of diesel vehicles with gasoline counterparts, including cars, SUVs, and pickups. This data was then combined with information on the price of depreciation, fuel, repair, maintenance, and other factors to calculate the total cost of ownership. The authors also did the calculations from the perspective that people would keep these models for three to five years.
While diesels carried a higher initial purchase price, the study showed that factors like insurance, repairs, and maintenance are actually higher, as well. However in the final tally, lifetime fuel cost savings of as much as 27 percent and – importantly – lower depreciation was more than enough to offset the other factors and made the diesels a better financial bet than their gas counterparts. Diesel pickups even showed resale values 60-70 percent higher than their gas versions.
“In particular, the idea that buyers can get a return on their initial higher investment in a diesel vehicle within three years is a very positive sign, considering new buyers tend to own their vehicles for an average of three-to-five years,” Bruce Belzowski, author of the study and managing director of the UMTRI Automotive Futures group, said in the announcement of the results. This research was sponsored by automotive supplier Robert Bosch LLC.