Go green and save money: buy a diesel

Have you ever wondered why anyone would buy a Diesel car? They're more expensive than a gasoline equivalent; you can't find any gas stations that pump diesel and if you can, diesel is more expensive than gas; they're dirty, sooty, loud and very, very slow. These are the common views of diesel autos and only some of them are true.

Modern diesel engines are very clean, quiet and can be very fast. Take Audi's 2011 Q7 that is able to hit 60mph from standing in just 5.5 seconds or it's smaller brother the A3 2.0 TDI, capable of a respectable 8.9 seconds to 60 and 42 mpg highway. This is the face of modern diesel engine's utilizing high pressure common rail fuel injection and new turbo technology.

Diesel engines are commonly used in trucks and large commercial vehicles. They are cheaper to run due to the higher fuel efficiency, cheaper to maintain due to their simpler design (no spark plugs) and depreciate less due to their longer lifespan.

Currently diesel fuel is more expensive by about 10% due to higher taxation - many commentators say this is due to pro-gasoline lobbyists; diesel is actually cheaper to produce than gasoline. Due to the higher efficiency and despite the higher tax, diesel is still about 10-20% cheaper per mile.

The main problem with owning a diesel car is the fact you have to find a gas station that you know sells it, that requires extra planning when our lives are complicated enough. However, a diesel is cheaper overall and can equal the performance of most gasoline autos.

So what about hybrids? The well known Toyota Prius can reach 48mpg on the highway, while sporting a small power house capable of 96 horsepower so it takes 10.5 seconds to reach 60mph. The place where the Prius comes into it's own is in the city, where it is able to hit 50 mpg, mainly due to it's regenerative braking. A modern diesel in the city achieves around 30mpg.

Let's take a look at the economics of a hybrid compared to a diesel: A hybrid costs around $4000 more to buy than the equivalent diesel. We will assume city driving, hence an average 50mpg for the hybrid and 35mpg for a diesel, with an average of 15,000 miles per year. You need 300 gallons of fuel for a year of hybrid use and 429 gallons for the diesel. At $2.90 gas and $3.20 diesel per gallon, one would save $501 a year using a hybrid, a payback period of 9.5 years (assuming annual inflation at 4%). At current fuel prices a hybrid vehicle is not considered an economical investment without further subsidies or higher taxes on gas and diesel cars. Even if fuel prices double to around $6 a gallon the payback period will be around 4.3 years, which starts to get more sensible. If one assumes highway driving the fuel efficiency improvement for the hybrid is negligible and hence the extra cost of the hybrid is certainly not economically efficient.

In Europe diesels make up over 50% of all cars. Very similar economics exist in Europe and in the US, the main difference being that diesel is available universally at every gas station.

If you can cope with the difficulty of obtaining diesel fuel, buy a diesel to save money and the environment. It's a positive feedback loop, the more consumers buy diesels the more gas stations will sell it, further increasing the market for diesels, etc. 

Now all we need is mass produced hybrid diesel to push the mpg up into the 70's. They're working on that...