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Tuesday, September 15, 2009

Gasoline vs Diesel Engines

During the past several weeks, I have had the opportunity to talk with several former diesel truck owners. Each of them had succumbed to last year’s high fuel prices and to a feeling that owning a diesel was simply too expensive – they had swapped their diesel-powered vehicle for a gasoline-powered counterpart. While I empathize with the feeling that something must be done when fuel costs double – a statistic that means thousands of dollars in additional fuel expenses per vehicle even for relatively low mileage drivers – but better to go do something benign, like write your elected officials, than to switch from diesel power to gasoline; at least if the desired result is to save money on fuel as well as on the total cost of ownership (TCO) of your vehicle.

Gasoline vs Diesel

I felt intuitively that diesels are less expensive to own and operate than gasoline-powered vehicles but when I looked at the numbers I was surprised at just how much money could be saved (or lost if you elect to follow the gasoline route). So here is my take on gasoline vs diesel.

Spend More, Save More

Even during the highest prices we saw last peak ($5.00-plus per gallon for diesel) it was still more economical to run a diesel vs gasoline vehicle. In fact for high load applications like heavy towing or hauling, you were saving more money then, compared to gasoline, than since diesel fuel prices returned to sane levels of around $2.20 per gallon. This is true even though diesel and regular gas prices are about the same now; and then diesel was running about a dollar more per gallon.
As I compare the cost of running diesel and gasoline-powered trucks, I am going to assume that the vehicle is used for high load operations such as towing a horse trailer or fifth wheel or for hauling heavy loads. These applications and others like them are the intended application for diesels. As we will see, you can use your truck to commute or to run errands and still find that diesels cost less to operate, but the savings are more pronounced and less affected by higher diesel prices when you are using your truck for the purpose for which it was designed.

Gasoline vs Diesel: Non-Fuel Expenses

Before we compare fuel costs, I want to look at some other expenses associated with owning and operating a truck. We will find that while some of these expenses favor a gas vehicle, that when we look at the overall total cost of ownership diesels win – before we ever compare fuel costs. Here are several areas to consider when we compare diesel to gas-powered vehicles. You may think of others, if so I’d love to hear about them.
  • Purchase Price
  • Lifespan
  • Maintenance Costs
  • Resale Value
  • Use
Let’s compare diesel vs gasoline for each of these categories

Gasoline vs Diesel: Purchase Price

A new diesel-powered truck will run $4,000 to $6,000 more than a otherwise similarly equipped gasoline-powered truck. I will use $5,000 for my comparison. That’s one for gasoline, or so it would seem.

Gasoline vs Diesel: Lifespan

Diesel engines are designed to last 500,000 miles whereas gasoline engines are designed to last 300,000 miles. Some folks, by using synthetic oils and otherwise taking especially good care of their truck will achieve 1,000,000 miles on a diesel or half that on a gas truck but for the purpose of comparison, I will use the first figures. Now, if we say that a new gasoline-powered truck costs $35,000 and a diesel costs $40,000, it means that my initial purchase cost breaks down per mile like this:
  • Diesel $40K/500K miles or $0.08 per mile
  • Gasoline $35K/300K miles or $.012 per mile.
So if we look at cost per mile, over the life of the vehicle, we see that the gas-powered vehicle costs more – fifty percent more – than the diesel-powered vehicle even though the diesel’s initial purchase price is $5,000 more.

Maintenance Cost

It is generally accepted that diesels require more upkeep than gasoline engines, however, the additional expense – about $150 more annually – is only a small percentage of the other annual costs. Both vehicles require oil changes (gasoline engines more frequently). Diesel fuel filters, however, are more expensive and must be changed more often. Air filtration systems and associated maintenance costs are similar. Injector maintenance will be greater for the diesel but the gasoline requires spark plugs. The diesel turbo should not involve any maintenance. Water pumps, radiators, alternators, etc are quite similar and are no more expensive on one or the other.

Gasoline vs Diesel: Resale Value

Diesel vehicles have traditionally enjoyed a higher resale value than their gasoline counterparts, presumably because their longer lifespan and lower cost of operation. However, the Law of Supply and Demand overrode those factors in last year’s fuel price spikes since many owners were selling their diesels under the mistaken notion that gas-powered trucks would be less expensive to fuel. Of course, this is good news for those of us in the know looking for a diesel-powered bargain. I expect diesel resale values to once again climb with the return of price parity between diesel fuel and regular gasoline. Of course both types of vehicles are susceptible to real and perceived fluctuations in value in the future that may affect their resale value.

Use

We will look at fuel costs comparisons soon but what a vehicle is used for affects its relative fuel efficiency when comparing diesel to gas engines. This is true because diesel fuel efficiency excels under high load/high torque applications. We will see that the particular use of a truck only determines the degree to which a diesel provides a better return on fuel expense. For its intended use of heavy towing or hauling, a diesel will provide 40 percent better fuel efficiency than a gas engine under the same operating conditions. If a diesel is subjected to serving as errand runner or commuter, then you may only realize a 25 percent advantage in fuel economy.

Show Me the Money

So what does this mean in practical, real-world numbers? Table One offers some insight. As I mentioned earlier, I will use the high load conditions for which the diesel is intended. When fuel prices are at current levels (around $2.20 diesel / $2.00 gasoline per gallon) you can expect to save around $1,700 per year or $140 a month in fuel expenses per vehicle. The next figure will show us just how irrational it is to swap your diesel when there is a fuel price rise that affects both gasoline and diesel fuel prices, as is typical. When diesel fuel reached $5 and regular gasoline was $4 last year, the savings realized by operating a diesel actually increased. The annual savings under such conditions is more like $2,500 (over $200 per month) compared to regular gasoline expenses. In fact, diesel prices would have had to reach $7 a gallon – with regular gas remaining at $4 – for gasoline vehicle operators to reach a break even point in terms of fuel expense. Table One also provides the TCO advantages for diesels under high load conditions.
Per Vehicle Annual Cost Comparison Gasoline vs Diesel Trucks
If you use your diesel as a daily driver, the advantages fall off significantly; still, when you factor in TCO the cost advantage still favors a diesel truck even under last year’s price conditions with fuel costs being a wash. Only if diesel fuel prices had exceeded around $5.50 per gallon (with gas staying at $4 per gallon) would things begin to break in favor of a gasoline truck when used as a commuter.

Gasoline vs Diesel: Conclusion

These factors I offered in this comparison are not all inclusive and others may occur to you. I encourage you to send me your comments at dan@maxxTORQUE.com. If you need a work truck for towing or hauling then the diesel-powered truck wins hands down. If you want a large truck or SUV and enjoy driving it for pleasure or commuting, you may start to feel the pinch when diesel prices exceed gasoline by 25% or more. In any event, it is wise to make your decision based on facts not fear.

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