Clean diesels bring a mess of decisions

Last Updated: March 15. 2010 11:02AM Brian J. O'Connor Clean diesels bring a mess of decisions Check out costs so that you don't get a dirty deal A clean diesel car can be good for the environment -- but will it end up cleaning out your wallet? With mileage that can be as much as one-third better than comparable gasoline engines -- hitting more than 40 mpg on the highway -- clean diesel engines can take a big bite out of your car's carbon footprint. The new diesels are much improved over the models that appeared in the late 1980s, with lowered tailpipe emissions and quieter performance that refutes diesels' reputation as noisy stinkpots. But the premium cost of diesel models and diesel fuel mean they also can take a bite out of your wallet. In many cases, it can take years for drivers to see real savings from the improved mileage of a diesel, notes John O'Dell, senior editor of the Green Car Advisor at Edmunds.com. "There is a cost savings on fuel, but you still have the premium diesel price on most models," O'Dell says. "It takes a while for the savings on fuel to offset that." Advertisement Figuring out the economics of clean diesel is a balancing act. You get much better mileage than a similar gas engine in most cases, but the fuel costs more, and you'll pay more for the car, in most cases. Some of the higher price is offset by federal tax credits for clean diesels, which run from $900 to $1,800, depending on the model. Auto shoppers need to add it all up to see how a clean diesel will affect the family budget. Clean-diesel imports All the clean diesels on the U.S. market are European imports, some of them high-end cars that use premium rather than regular fuel. That erases some of the concern about diesel fuel, which cost 17 cents more per gallon than regular gas in Metro Detroit last week but was 11 cents per gallon cheaper than premium unleaded. As the chart here shows, an Audi A3 diesel has a quick payback, because its gasoline twin uses premium unleaded. But savings on a VW Golf diesel take longer to realize, because the comparable gas model runs on regular unleaded. Driving habits make a big difference, too. Someone who drives 30,000 miles a year instead of 15,000 cuts the payback time in half, while a driver who sticks around town will need longer to recoup the investment. The years-long payback period for clean diesels still is shorter than it takes many hybrid buyers to make their money back, though. A 2009 analysis by Edmunds.com found that the gas savings on a Toyota Camry hybrid would earn buyers back their hybrid premium in about six months, but that buyers of a Ford Fusion hybrid would need more than seven years. In addition, many of the tax credits for the more popular hybrids are expiring as manufacturers hit their quotas, making those cars more expensive, notes Bradley Berman, editor of the Web site Hybridcars.com. For hybrid models, "the Toyota and Honda tax credits are gone and Ford tax credits will be gone by April," Berman said. Volkswagen has announced that tax credits on its TDI clean diesels will phase out between July and the end of the year. Diesel advantages abound Besides strict calculations on cost, there are other factors that can make a clean diesel a good choice, such as size and performance. While most hybrids are smaller vehicles, Berman points out that the VW Jetta TDI Sportwagon is a popular, clean diesel because of its larger size. "If you like the wagon platform, for instance, there's not a hybrid wagon or minivan that fits that profile," he says. When it comes to the overall driving experience, clean diesels also have an advantage, notes Mike Quincy, an auto specialist with Consumer Reports who recently took a spin in a VW Golf turbo-diesel at the test track and reports getting an impressive 38 mpg with a manual five-speed transmission. "That compares very favorable to our last test on a Toyota Prius, which got 44 mpg," Quincy says. "But the Golf is so much more engaging to drive. If you line them up side by side, most of my colleagues would choose the Golf. It's just so much nicer to drive." Diesel engines also are quicker off the line to accelerate and can offer much longer cruising range for long trips, he adds, such as the Mercedes E-class diesel. "The cruising range was 600 miles on one tank of fuel," Quincy says. "It was beautiful." There are other pros and cons for clean diesel cars. For example, diesels engines last longer and need less frequent tune-ups, notes O'Dell of Edmunds.com "Your tune-ups are farther apart but they're little more expensive. It's just that you have lot more reliability," he says. "A diesel engine is barely broken in at a couple hundred-thousand miles, so the big savings is on repairs. You're not going to develop the wear-and-tear problems." Residual value is higher The longer life of diesels also offers an advantage in residual value, O'Dell adds. "There are two- and three-year-old Jetta diesels selling for a higher price than they sold for new," he says. "We anticipate the resale value on most new diesels will follow the same trend." The big variable in deciding how much financial sense a clean diesel makes comes down to fuel costs, the experts say. If the price of diesel drops, the savings get bigger, but if the cost increases, so will the time to recoup any purchase premium. 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