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  • University of Michigan Insists Diesel Costs Less than Gas, Overall

University of Michigan Insists Diesel Costs Less than Gas, Overall

Fuel Economy, Resale Value Trump Maintenance and Price Premiums

Jul 9, 2015
Vehicles with clean diesel technology cost less overall than their gasoline equivalents, according to a researcher at the University of Michigan Transportation Research Institute.
Bruce Belzowski, managing director of the college’s Automotive Futures Group, suggests that in spite of volatile fuel costs and a higher initial investment required to own a diesel instead of a gas vehicle, the oil burner’s overall cost of ownership is lower. Belzowski claims that the savings can be between $2,000 and $7,000 over three to five years.
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The reason for this is primarily thanks to a diesel vehicle’s generally excellent resale value and lower fuel cost over a gasser. Amazingly, for most of the vehicles Belzowski researched, diesel resale values after three to five years were at least 30 percent higher, and although maintenance, insurance, and taxes were generally more expensive for oil burners, lower average fuel costs more than offset those fees.
Belzowski posed his theory after evaluating thousands of gasoline and diesel versions of the same vehicle sold at auction in 2012 and 2013, using data that included Audi, BMW, Mercedes-Benz, and Volkswagen passenger cars and Chevrolet, Ram, Ford, and GMC pickup trucks.
The only significant flaw in Belzowski’s claim is that he only looked at vehicles that were between three and five years old, a window he chose intentionally since that’s the average length that most customers hang onto their vehicles. However, we know many people who’ve driven the same TDI, Duramax, or Cummins for a dozen years (or more), so the question remains as to whether their vehicles are still cheaper to own.
That said, resale values for even the oldest diesel vehicles trend higher than their gasoline counterparts. Whether buying a Detroit Diesel, IDI, early Cummins, Mercedes-Benz, or Volkswagen diesel, price premiums can be thousands more than their gasoline counterparts in similar condition. As always, more data is needed to definitively answer the cost question on these older diesels, but anecdotal evidence suggests good things.
Of course, there will be no need to convince those who are addicted to the ecological benefits of biofuel, diesel’s intrinsic groundswell of low-end torque, and long-haul reliability of an oil-burning engine.
Source: University of Michigan Transportation Research Institute, Automotive Futures
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