Total Cost of Ownership: A Gas Versus Diesel Comparison
The U.S. automotive market is evolving to a more fuel-efficient fleet, and alternative powertrains are part of the mix of options that manufacturers and consumers view as part of this evolution. This report reviews the role clean diesel vehicles play in the current vehicle fleet by analyzing the total cost of ownership (TCO) for clean diesel vehicles and comparing their TCO to that of their gas vehicle counterparts. We build our TCO model by developing three- and five-year cost estimates of depreciation by modeling 2011-2012 used-vehicle auction data and fuel costs by modeling government data. We combine these estimates with three- and five-year estimates for repairs, fees and taxes, insurance, and maintenance from an outside data source. Our results show that clean diesel vehicles generally 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 trucks, and luxury vehicles.
Keywords: total cost of ownership, clean diesel vehicle, fuel economy, auction, used vehicles