Going Green: Is a diesel worth the premium?
Go Green, Save Green
Saving money while helping save the environment is a lofty goal, but is it possible with today’s new cars? The answer is YES! With advances in technology, and increasing government mandates, today’s cars are more fuel efficient and safer than ever before.
Tremendous advances by the oil industry have made today’s fuels cleaner than ever too. The diesel that you bought at the pump as recently as two years ago contained at least 500 parts-per-million (ppm) sulfur, while the clean diesel available today has been reduced to 15 ppm!
Recent advances in technology have allowed manufacturers to improve diesel engines with new particulate filters, catalytic converters, increased fuel pressure, etc. Today’s diesel is more powerful, quieter, and less harmful to the environment than
There’s no doubt that today’s diesels are better for the environment. But does a diesel make sense for you? Here’s a simple formula to determine if the added cost of a diesel will pay you back in fuel savings.
1. Determine your annual miles driven.
2. Divide your annual mileage by the combined fuel economy of the car you’re considering. The result is the average number of gallons you will use in a year. Fuel economy data is available on the car’s window sticker or at the EPA’s web site http://fueleconomy.gov You can also pick up a free guide at your new car dealer.
3. Multiply the annual number of gallons by the current price per gallon. This will be your annual fuel cost.
For example: Joe is considering a Jetta Sportwagen, but he’s not sure if the diesel will save him money in the long run. He wants to compare two similarly equipped vehicles: the Jetta Sportwagen SE with a 2.5 liter gas engine and the TDI with a diesel.
He finds Edmunds.com lists the price of the TDI with automatic DSG transmission and no options at $26,160, while the SE automatic lists for $23,700, a difference of $2,460. If he buys the TDI before July 1st 2010, he’ll get a $1,300 tax credit, but we’ll leave that out of the equation for this example.
Joe drives 15,000 miles per year. The TDI gets a combined 34 mpg, while it’s gas counterpart is rated at 25 mpg. Joe divides his annual miles by the combined miles per gallon to come with a total number of gallons of 441 for the diesel and 600 for the gas-powered SE. Regular gas is currently selling for $2.75 per gallon, while diesel is $2.99, so his annual cost would be $1318 ($2.99 x 441) for the TDI, and $1650 ($2.75 x 600) for the SE, a difference of $332 per year.
At this rate it would take Joe 7.4 years to recoup the additional up-front cost of the TDI. Since TDI owners tend to keep their vehicles for a long time, the TDI makes sense for Joe. Especially with Biodiesel gaining in popularity.
Fuel economy is just one comparison to consider. Granted, it’s the most important one in many shopper’s eyes these days, but for more comparisons, check out Kelley Blue Book’s side-by-side comparisons.
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