Even diesel falls short at efficiency premium payoff

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Jetta TDI

One of the original economy packages, a diesel engine, doesn't recoup the efficiency premium with fuel savings in short enough time. Image from Wikimedia Commons.

There is such a thing as an “efficiency premium,” where cars cost more for a more fuel-efficient version. However, the fuel savings won’t always recoup that premium, with even diesel cars taking a long time to achieve the efficiency premium payoff.

Fuel efficiency premium pay off known to take years

Car makers are continuing to push fuel efficiency packages, which add thousands of dollars in some cases to the sticker price. Engine and fuel injection tuning, hybrid, mild hybrid and other technologies are being put to use to save trips to the pump

Unfortunately, the upfront or “opportunity” cost can take years to be recouped by fuel savings, sometimes longer than the owner will have the car for. Car companies are relying on this short-term bias, as in getting people to only think about how much gasoline they buy, to sell cars, which a number of studies and publications have shown. Every type of fuel-saving technology falls short regarding the efficiency premium payoff including, according to The Telegraph, diesel cars.

Survey says

An evaluation by “Which?” magazine, essentially the English version of “Consumer Reports,” looked at various diesel models of popular cars and their gasoline, or as they refer to it, petrol, counterparts, according to the Telegraph.

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Granted, more Europeans buy diesel cars than Americans. However, in England, diesel fuel costs more, at 5.5 pence (one-hundredth of one pound) more per liter, and diesel cars cost more, typically adding 1,000 pounds to 2,000 pounds (about $1,565 to $3,129) to the purchase price. Both are true in the U.S., as well; diesel costs more at the pump, diesel cars cost more at the dealership.

The comparison by “Which?” determined that despite being up to 10 miles per gallon more fuel efficient than petrol models, many diesel cars took too long to pay the efficiency premium back. A Ford Fiesta diesel would take 7.8 years to realize a savings despite getting 15 miles per gallon more, with a 2,400 pound-price difference. The BMW 530 diesel, getting 7 mpg more than the gas version, would take 14.1 years to pay off with a 3,645 pound-price gap. The best of the lot, the Volkswagen Sharan MPV, took only 3 years.

Same true for economy tuning specials

The same problem exists in the U.S. A 2010 article by CBS found a Volkswagen Jetta SportWagen and Touareg SUV, which cost $1,275 and $3,500 more than the gas models, respectively, would take 6.3 and 10.5 years for the boost in fuel efficiency to generate savings. The Audi A3 diesel takes 4.7 years, just in time for the owner to sell it.

Even “eco” packages, which use engine tuning to optimize cars for fuel efficiency, don’t save enough on fuel to pay back the premium. Some will, though, according to TrueCar.com. Mazda charges $1,084 to add the SkyActiv package to the Mazda3 Touring sedan, which pays off in 1.9 years. Chevrolet’s $635 EcoTec engine package in the Sonic pays off in 2.9 years, and Ford’s EcoBoost engine package pays off in 3.3 years in the Ford Edge and 4.5 years in the F-150. Others take longer. Ford’s SFE package for the Focus takes 12.4 years to pay off and 36.2 years in the Fiesta. The worst is the Chevrolet Cruze Eco, which takes 48 years to pay for the efficiency premium.





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