Are the Cheapest Diesel Cars Worth the Price?




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.

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