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Home » Auto Ownership

Are the Cheapest Diesel Cars Worth the Price?

Last updated by on 17 Comments

Diesel vehicles have come a long way over the years.

For starters, mass-market diesel cars generally aren’t noisy like they once were.

They also put out less greenhouse gases and have higher fuel efficiency than their gasoline powered cousins. And diesel engines have always lasted more miles than gasoline – so you can buy one and run it into the ground.

But, do they make sense to buy? Americans haven’t exactly been crazy about them.

Why is Diesel Vehicle Market Share in the U.S. so Low?

Diesel vehicles exceed 40% of the market share in Europe, however, diesel market share in the U.S. is just 2.2%, according to the Wall Street Journal.

Why?

Smog. Diesel vehicles put out more black sooty particulate matter (PM) and NOx (oxides of nitrogen) emissions, which lead to smog and adverse health effects. The California Air Resources Board, as a result, has put higher regulation standards on diesel vehicle emissions than the EPA.

As a result, very few vehicles meet both CARB and EPA clean diesel standards and only VW, Audi, Mercedes, BMW, and makers of a few heavy-duty trucks have entered the U.S. market.

cheapest diesel cars

Diesel Car Fuel Efficiency

In my most fuel efficient cars post, diesel lovers made their voices heard – THEY. LOVE. THEIR. DIESELS. When you look at their fuel efficiency, it’s easy to see why.

It’s a shame that more vehicles haven’t met environmental regulations because they sip fuel. Diesel has higher energy output per volume than gasoline, making the engine more efficient. Diesels tend to have 20-40% better fuel efficiency than similar gasoline vehicles.

Diesel has soared to high market share in Europe because it is cheaper than gasoline there. That has not been the case in recent years in the U.S., as diesel prices have trended modestly higher than regular unleaded. According to fueleconomy.gov, U.S. diesel prices averaged $3.93 per gallon as of March 28, 2011, while regular unleaded averaged $3.59.

Here’s a look at how the two fuels have trended over recent years.

source: U.S. Energy Information Administration

That hasn’t always been the case. A number of Gulf petro refineries that specialized in refining diesel have shut down, causing prices to increase.

With increased diesel production leading to lower prices in the future, new models entering the market, and improved emission controls, you might want to strongly consider a diesel for your next purchase.

The Cheapest Diesel Cars:

One thing we haven’t discussed yet: diesel cars aren’t cheap. At least compared to their gasoline cousins.

This is a personal finance blog, so I’m not going to discuss diesel vehicles that cost in excess of $45,000 – the Mercedes ML 350 Bluetec, Mercedes E350 Bluetec, VW Touareg, Audi Q7, BMW X4 XDrive35d.

There are actually only three vehicles on the market for around $30K and under – the Volkswagen Jetta, VW Golf, and the Audi A3. I’ll cover each of them and compare them to their gasoline powered relatives.

Note: Annual fuel costs are from fueleconomy.gov and are based on a price of $3.91 for a gallon of diesel and 15,000 annual miles (55% city).

Volkswagen Jetta TDI

Jetta TDI:

  • VW Jetta TDIMSRP: $24,095 for the 6-speed automatic and $22,095 for the 6-speed manual
  • hwy mpg: 42, city mpg: 30
  • annual fuel costs: $1,724
  • co2 footprint: 6.2 tons/year

Jetta (Gasoline):

  • MSRP: $19,095 for the 6-speed automatic and $17,995 for the 5-speed manual
  • automatic – hwy mpg 31: , city mpg: 24, manual – hwy mpg: 33, city mpg: 23
  • annual fuel costs: automatic: $1,981, manual: $2,062
  • co2 footprint:  automatic: 6.9 tons/year, manual: 7.2 tons/year

Volkswagen Golf TDI

2 Door Golf TDI:

  • VW Golf TDIMSRP: $24,325 for the 6-speed automatic and $23,225 for the 6-speed manual
  • hwy mpg: 42, city mpg: 30
  • annual fuel costs: $1,724
  • co2 footprint: 6.2 tons/year

2 Door Golf (Gasoline):

  • MSRP: $19,095 for the 6-speed automatic and $17,995 for the 5-speed manual
  • automatic – hwy mpg 31: , city mpg: 24, manual – hwy mpg: 33, city mpg: 23
  • annual fuel costs: automatic: $1,981, manual: $2,062
  • co2 footprint:  automatic: 6.9 tons/year, manual: 7.2 tons/year

Audi A3 TDI

A3 2.0 TDI:

  • Audi A3 TDIMSRP: $30,250 for the 6-speed automatic (no manual version offered)
  • hwy mpg: 42 , city mpg: 30
  • annual fuel costs: $1,724
  • co2 footprint:  6.2 tons/year

Audi A3 2.0 (Gasoline):

  • MSRP: $28,750 for the 6-speed automatic and $27,270 for the 6-speed manual
  • automatic – hwy mpg 28: , city mpg: 22, manual – hwy mpg: 30, city mpg: 21
  • annual fuel costs: automatic: $2,383, manual: $2,383
  • co2 footprint:  automatic: 7.8 tons/year, manual: 7.8 tons/year

The Value of Diesels

Once you get past the ‘I’m cool, I have a diesel’ ego boost, I’m just not seeing the payoff with the Jetta and Golf models. If you’re only saving $200 or so per year on fuel yet paying $5,000 or $4,000 more for the vehicle, you will likely never break even.

The A3, however, presents a money saving opportunity (comparatively). The diesel version is only $1,500 more than the gasoline, yet you’re saving roughly $650 per year at current fuel prices. You’d break even shortly after two years with the existing price spread. Why not go with with the diesel?

But when you compare all three models to the fuel efficiency of a Toyota Prius or the price and fuel efficiency of a Ford Fiesta, I don’t see how any diesel makes sense economically. If you do buy one, go used to save money.

Diesel Discussion:

  • Would you pay up for a diesel? why?
  • If you’re a diesel lover, convince readers why they should consider a high priced diesel over cheaper alternatives.

About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


17 Comments »
  • Warren says:

    The increased weight of a diesel engine is a major reason there is not more difference in the city mpg ratings. For someone who travels long distances on the highway (long distance commuter or in sales) the diesel can easily pay for itself. For a heavily packed car, the weight will have less effect on the deisel MPG than the gasoline car so this also benefits the long distance sales person.

    The benefit of a diesel engine outlasting a gasoline engine for someone who drives a large number of miles can be significant by avoiding the cost of one or more engine rebuilds/replacements. An unseen benefit is that due to the heavier weight of a diesel engine, some components of a diesel care are more rugged which reduces repair costs in the long run for a higher milage car.

    On the other hand, the benefit of a diesel engine outlasting a gasoline engine is not relevant if the gasoline engine is not driven enough miles to cause problems. I have over 210,000 miles on my 14 year old gasoline powered Geo Prizm and it appears that rust and other problems will casue the car to be retired, not the life of the engine.

    A big unknown is the future cost of gasoline. If the price increases, so does the savings from diesel.

  • Tara says:

    My dad is a huge proponent of VW cars. He thought I should go for a VW Golf or Jetta TDI. I ended up with a Ford Fiesta and looking at the price tag – my final price after negotiations and taxes and other fees for a fully stocked Fiesta was a full $3,000 below the MSRP for a VW Golf TDI. The fuel consumption is pretty much the same (I’m now getting 40 mpg on the highway and 30 mpg in the city), plus I don’t drive that much, so I don’t think I would work that off in even ten years.

    Diesel prices also aren’t nearly as good as they used to be – they used to be significantly cheaper than gasoline prices, but that gap is closing in now.

    Don’t get me wrong, I think the TDIs are great cars. But the price tag just isn’t worth it to me. I’d rather get a fancier car than pay for the diesel engine.

    • RIFF724 says:

      hi tara . congrats on yer ford fiesta , I must ask though if you and your dad have looked into the harmful effects of ethanol which is in all gasoline now except for straight gasoline which is about the same price as diesel and doesn’t eat away the seals and rings in a regular gasoline engine , many reports and undisputedly confirm the harmful effects of ethanol on regular combustion engines such as yours

  • Paul says:

    G.E., great post.

    The biggest reason people do not consider diesels more whole heartedly is that they fail to do price per mile equations. JUST speaking on fuel costs, a diesel will always be cheaper to run (even with more expensive fuel); add on top of that the lower maintenance costs of diesel vehicles and you have huge winners for your pocket book (note this does not apply to the Mercedes BlueTec or any urea injected diesel – they will still be cheaper per mile but their maintenance costs are about equal to gasoline).

    I strongly believe many people do not consider diesels because they think of old smoke belching buses and dump trucks.

    Diesels over their life actually WILL make up their additional upfront costs, which Hybrids will not. Secondly, they are incredibly fun to drive.

    • Warren says:

      It’s ironic about old smoking busses and dump trucks because it’s an advantage that diesel’s have that allow for the smoke. A well maintained diesel engine will not put out the black soot.

      Engines wear, need a tune up, or things break. Eventually things get so bad that the engine runs so poorly as to be unusable or stops running. A diesel engine will generally tolerate a level of problems that would stop a gasoline car. A gasoline engine dies before it gets bad enough to throw out the black smoke while the diesel still runs so the gasoline engine is seen as cleaner.

      • Tim says:

        Also it does not produce as much Nos gasses and gas. It also produces less monoxide and hydrocloric acid. Oh yes your cars do release that as vapor form in a gas car. This is true for the diesels that unrestricted airflow. This allows more oxygen to bond in the formula. If you starve that oxygen then you produce monoxide. Most people don’t even know this.
        Diesel also requires less work to move. The fuel burns more efficiently and doesn’t explode like gas does. Heck it takes a lower temp to ignite diesel fuel so it only needs compression to work. This is why I am looking for diesel.

  • Jim says:

    I have a sales related job and have owned both a 2007 Toyota Prius and currently own a 2009 Jetta Sportwagen TDI.

    The Prius is an obvious financial winner. I purchased mine used with 26000 miles for $17,000. My TDI was $22,500 with 11,000 miles. Both were purchased in excellent condition.

    The two cars are always compared. They really shouldn’t be. What the Prius is good at;
    1. low maintenance (after having 80,000 miles on the car all I changed was the oil, tires and windshield washer fluid)
    2. Better fuel economy (I rarely got less than 44mpg and often got the stated 48mpg and I generally drive 5-9mph over)
    3. Lower fuel prices (get a costco business credit card and buy your gas there and you will pay 10% less for gas than most other people.)
    4. Many gas stations, especially in cities, still don’t have diesel. Costco also doesn’t. Not too big of a deal, but it is kind of annoying.

    …the VW loses at. On the same routes (driven the same way) that got me the milage listed above, I get 37mpg out of the diesel. (The Prius is much more efficient in the city 48mpg vs 28).

    Jetta maintenance is ridiculous. $100 oil changes (DIY is still $65). Fuel filters every 20,000 miles (they clog fast and you can tell). For example:
    First 36000 miles….free maintenance (marketing BS)
    car has 40,000 miles on it….dealer bill is $875
    car has 50,000 miles on it….$100 (oil)
    car has 60,000 miles on it….$270 (fuel filter + oil)
    car has 70,000 miles on it….$100
    car has 80,000 miles on it….$875

    That cool panoramic sunroof…$62 to have the dealer grease the tracks (part of $875 cost every 40k). You need a contraption to get the stuff in to so it is a total pain. I’m still on the original brakes on the Jetta at 78,000 miles. I was on the Prius too. Can’t wait to see the bill for those. When you think all the items I listed above you can get done from an independent shop, the prices are the same or more. The independent shop actually charges $10 more for the oil change.

    Filling at the gas station is much dirtier too. Diesel is more like oil. Gasoline is a solvent. So the pump handle is usually moderately clean to disgusting. Not usually a problem, but if you are wearing nice clothes you want to be careful. Next time you are at a gas station, look at the cement around both types of pumps and you will understand.

    The VW is great in other ways though:
    1. Quiet. I mean the car is silent. When you sit in it driving 80mph down the freeway with studded snow tires it is quiet. Can’t say the same about the prius
    2. More cargo space than a prius
    3. Better in the snow. The prius is junk without snow tires but very good with. The jetta is great.
    4. The ESC in a Jetta outdoes the Prius. I’m not actually sure what it does in a Prius. I’ve never felt it work. In the Jetta, you feel it. If you start sliding in the snow, it will brake an individual wheel (typically in the rear) to correct the car and attempt to straighten in. You can feel which wheel is breaking and which isn’t. If my Prius did this as well as the Jetta, I would probably still have it.
    5. I live in Colorado and drive from Denver to Western CO every Monday and back at the end of the week. It has no problem climbing the mountains. I would argue that for the 2 minutes a Prius is actually going slower than you want it to the whole trip it isn’t worth the gas milage sacrifice of a more powerful car. Just be more patient. In the Jetta, it is very impressive to be climbing out of Denver in 6th gear where the Prius was sucking every last drop of energy from the battery to make it up floored.
    6. Passing is easier in the Jetta
    7. Resale value is better on a Jetta which helps recoup the higher upfront cost.
    8. Driver seat is more comfortable
    9. Car feels safer

    If you are looking to save money, get a Prius. If you rather have a more refined car and don’t care too much about the expense of it, get a Jetta. If you really care about the environment, the “clean diesel” is more hype than reality. A new Prius gets an emissions score of 9 out of 10 from the government (higher is better). The Jetta only gets a 6 and puts out more CO2.

    Next Monday I get to spend $875 on my 80,000 mile maintenance….plus whatever made the check engine light come on.

    Hope that helps some of you decide.

    • G.E. Miller says:

      Wow, very informative post. Thank you for sharing!

    • Tim says:

      I know your really biased here. You should really look at what a gas engine puts out. it is much worse on the enviroment. The whole it garbage on the fuel means you don’t know college chem at all. Also CO2 is nothing compared to the CO1 you are putting out using gas. At least plants will suck up that CO2. The CO1 is just killing everyone. You also produce a lot of acid burning gas for the same reasons. It not just water that drips from your tail pipe bud. Also many diesel engines get over 40 miles to the gallon even in cities. Just most morons don’t know how to drive or use a manual right.

  • Carl says:

    Comparing the base MSRP of the diesel and gas versions of the VW cars (both Jetta and Golf) isn’t quite apples to apples like the article suggests. You are paying for more things than just a diesel engine in the price difference between the gas and diesel models. A number of features that are options in the base gas version are standard in the base diesel version. Examples include: leather trim/seats, touch-screen radio, alloy rims, controls on steering wheel, bluetooth, etc. Factoring these in bring up-front cost closer between the two engines, to the point where the fuel savings of the diesel can make up the remaining difference.

    I wonder if the A3 price difference is less since the cars are more ‘even’ in the features they include?

  • Joe says:

    I would consider the Fiesta if not for the fact that it’s smaller than the Jetta and we’re expecting an addition to the family soon.

  • Warren says:

    A diesel engine has twol advantages over a gasoline one:

    1. It will last longer. I know several people who have driven TDIs over 200,000 miles. The repair costs are higher but you also have to factor in how frequently you need to buy a new car. Diesel engines run at higher torque, so if you are going to be carrying heavy loads, and not trying to go super fast, it is also an efficiency savings (hence the reason that all heavy-duty trucks run on diesel)

    2. Biodiesel. Up to 5-20% blends of biodiesel can be blended into a new diesel engine under warranty. If you are interested in reducing your dependence on foreign oil, you can buy a fuel that is made right here in the USA, and has lower emissions that petro-diesel. If you really want to save money you can make your fuel yourself from waste cooking oil and not have to worry about fuel prices anymore.

  • Boris says:

    Well, i think your numbers are wrong. Since all gasolene models that you used to compare can only take Premium gasolene, the fuel saving with diesel would be about $0.20-0.30 more per gallon then you mentioned. 99% of German cars use permium fuel, so dont forget that in your calculations.

    • RIFF724 says:

      HI BORIS if I am not mistaken even the ethanol in gasoline is a major engine killer , except for the straight gas with no ethanol that is slightly more exspensive than diesel anyway

  • Jon says:

    Everyone has a different need but the biggest win for diesel personally are two reasons:

    1. The engine just last longer. I know people with diesel cars that have 300K and still going strong. If you look on google, there are communities of people with 10-30 year old diesel cars that have 200k+ miles on them. So if you are the kind of person who runs a car into the ground before buying a new one, then diesel is for you.

    2. Many diesel engines can run on biodiesel that you can make at home. If I every get a diesel car, I will wait until the warranty is up and start making bio-diesel in my garage. I have family members that own restaurants so I have access to free used veg. oil. Also I like to make things on my own and it’ll be a fun hobby. With the price of chemicals added in, cost should be around $1.50 a gallon of fuel.

  • RIFF724 says:

    I HAVE NOT READ ALL OR EVERY COMMENT HERE BUT WONDERED BECAUSE I AM LOOKING TO BUY A DIESEL , ISNT A BIG PLUS THAT THE CAST IRON BLOCKS AND DESIGN OF THE ENGINE A BIG PLUS WHEN IT COMES TO A DIESEL ?

  • RIFF724 says:

    AND ALOS THE FACT THAT ETHANOL IN ALL GAS IS HORRIBLE ON A GASOLINE ENGINE WHICH EVEN REGULAR GASOLINE WITH NO ETHANOL IS HARD TO FIND IS STILL EVEN MORE EXSPENSIVE THAN DIESEL

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