Total cost of ownership : a diesel versus gasoline comparison (2012-2013)
Authors: Bruce M. Belzowski
There are dramatic changes taking place in the U.S. automotive industry as it moves to meet stringent government mandated Corporate Average Fuel Efficiency (CAFE) requirements. Clean diesel engine technology represents one of the technologies companies are using to improve fuel economy. This report not only compares the fuel efficiency of clean diesel vehicles to comparable gasoline versions of the same vehicle (sold at auction during the 2012-2013 timeframe), but it also compares the total cost of ownership (TCO) between the two types of technologies. The report is a followup to our previous work on the total cost of ownership comparison of vehicles sold at auction during the 2010 and 2011 timeframe. The TCO model is built by developing three- and five-year cost estimates of depreciation by modeling used-vehicle auction data, as well as developing estimates for fuel costs by modeling government data. This report differs from the previous report in that it controls for the trim levels of the different vehicles. The depreciation and fuel cost estimates are added to three- and five-year estimates for repairs, fees and taxes, insurance, and maintenance from an outside data source. The results show that clean diesel vehicles provide a return on investment in both the three- and five-year timeframes, though there are differences in the amounts of return among mass market vehicles, medium duty pickup trucks, and luxury vehicles, as well as passenger cars, sport utility vehicles (SUVs), and medium duty pickup trucks.