Diesels Paying Back Quicker Than Hybrids, Edmunds.com Reports

[AVANTI R5]

With gasoline and diesel fuel prices staying low -- and uncharacteristically consistent -- as



the summer progresses, data analysts at Edmunds.com, parent of AutoObserver, did a recent crunch of the often-discussed payback times for the nation's two competing fuel-saving drivetrains, hybrid-electric and diesel-engine vehicles.

The latest round goes to diesel.
There are two factors currently working in diesel's favor. First, diesel-fuel prices have dropped precipitously since last summer's explosion to $4 per gallon (and beyond) and normalized to pricing quite near regular unleaded gasoline.

Second, the price "premium" for diesel technologies is low -- and in a few cases, combines with federal tax credits to make the diesel-powered vehicle actually cheaper than a comparable gasoline-engine variant of the same model. For those vehicles, diesel-engine payback time is immediate.

Gasoline Price Low, Hybrids Lose

Conversely, Edmunds.com analysts point out that as gasoline prices stay low, hybrids struggle to justify their typically higher initial-cost premium.

The average premium for all hybrids is $4,981, with premiums ranging from just a few hundred dollars (Toyota Camry Hybrid: $289) to big-bucks upcharges such as the GMC Sierra Hybrid ($7,493) and perhaps the ultimate hybrid, the Lexus LS 600h L ($15,969) from Toyota's upscale division.

The average diesel-engine premium, meanwhile, currently is just $2,360.

The cost premium for both technologies is derived by including all available incentives and tax credits and uses Edmunds.com's proprietary True Market Value to determine each vehicle's "real-world" cost, which often is less than its actual MSRP.

Hybrids: Still a Costly Choice




Using current gasoline and diesel-fuel prices -- $2.53 per gallon for gasoline and $2.54 for diesel - hybrids can't touch the payback times for diesel-powered models.

Using a 15,000-mile annual driving figure, the lowest hybrid payback time is slightly more than six months for the Camry Hybrid. The Lexus RX 450h, one of the market's most popular hybrids, requires six years' worth of 15,000-mile-per-year driving to pay back its $2,792 premium.

But most hybrid models take longer to recoup their initial extra cost at today's gasoline prices. One typical example is Ford Motor Co.'s 2010 Fusion Hybrid: its $4,175 premium over a conventional Fusion requires 8.1 years to achieve payback, say Edmunds.com data analysts. A Honda Civic Hybrid:13.3 years.

The longest hybrid payback time: the already mentioned Lexus 600h L -- 70.3 years at current gasoline prices.



And one intriguing "special" comparison comes between Toyota's redesigned 2010 Prius and Honda Motor Co. Ltd.'s all-new Insight. Consumers and hybrid enthusiasts have argued about each car's "value" compared with the other, but judged strictly by their price in relation to their EPA fuel economy, the Prius costs $4,030 more than the Insight and would require 26.2 years of driving to recover its "premium" over the price of the Insight.

Diesel Payback: Can't Touch This

Thanks mostly to markedly lower cost premiums and the widespread availability of tax rebates, diesels currently are a much better payback proposition. Current market conditions also mean many diesels are selling for less than MSRP.
Those looking to maximize payback will shop Mercedes-Benz: generous tax credits have diesel-powered variants of the GL- and R-Class currently with True Market Value figures less than their gasoline-engine counterparts.

A diesel-powered 2009 GL320 CDI is a giant $2,745 less than the GL450 (which uses a gasoline V8), leading to a payback immediately upon purchase of the diesel model.
The same is true for the 2009 R320 BlueTec, which ends up costing $136 less than the gasoline V6-motivated R350. And Mercedes' 2009 ML320 BlueTec also is a fine deal in relation to its gasoline-engine counterpart, with a premium of $508 that is paid back in just 1.4 years of 15,000-mile-per-year driving.

Other diesel payback times include Volkswagen's popular Jetta TDI, at 4.1 years to pay back its $1,760 premium; BMW's 335d, at 5.6 years to pay back a $2,558 premium and BMW's X5 xDrive 35d at 4.6 years to pay back its $1,732 premium.

The longest diesel payback time is 20.6 years for Mercedes' E320 BlueTec. -- By Bill Visnic

Photos by Manufacturers
1 - Diesel-powered vehicles like the Mercedes-Benz's GL320 CD represent a great deal at the moment because diesel pays back at the moment of purchase. (Photo by Mercedes-Benz)

2 - The longest hybrid payback time is the Lexus 600h L at 70.3 years at current gasoline prices. (Photo by Toyota)

3. In the much-argued measure of which hybrid delivers more efficiency in relation to its cost, Honda's new Insight hybrid whips up on its chief rival, the Toyota Prius. It would take 26-plus years of driving to negate the Prius' higher price

http://www.autoobserver.com/2009/07/...m-reports.html

[Slack]

Come on, Subaru. Bring over a diesel Impreza and I will buy it in a heartbeat.

[max_stirling]

There are other factors that make diesels better deals long term. Diesels engines are well known for lasting forever. 250K miles on an old 80's MB diesel is not uncommon. On the other hand, Hybrid batteries are only expected to last 7-10 years. Don't know how that equates to mileage. Anyway, when the batteries die, there will be a huge expense to replace them, which significantly effects resale value at the 5 yr mark which is part of the overall cost of ownership. One will less likely buy a 5yr old hybrid if there's a possibility to that a $3-5K battery replacement could occur a couple years down the road.

I have nothing against hybrids, but diesels and compact cars with small gas engines are a better financial choice. I think the next quantum leap will be when full electrics or range extended electrics become main stream.

[RichM]

IMHO, diesel makes sense for people that have steady speed highway commutes (I happen to be one of these). Hybrids make sense for people that deal with stop and go traffic. Both can exist together (My brother happens to be this type).

But.... bring out the haters, on both sides.


Go Diesel

[SLegacy99]

Wasn't this already posted?

[themarxist]

Originally Posted by max_stirling

There are other factors that make diesels better deals long term. Diesels engines are well known for lasting forever. 350K miles on an old 80's MB diesel is not uncommon.

Fixed. Diesel FTW, as usual.

[Scrotus]

Pointless redundant information that everyone with half a brain already knew. Even hybrid owners knew it already. You don't buy a hybrid because it makes financial sense -- you buy it to make a statement. That it costs a premium to do so just sweetens the deal. Just look how committed to the environment you are...

[Kubek]

In 80's, 2 liter diesel had ~70hp. Right now 2 liter diesels have ~140-200hp. I won't expect them to last as long as old MB's.

Also, diesel is only good as long it's covered under warranty.
For example,
2005 VW Golf desesl (MSRP):
- injector (ONE) $263-$318
- fuel pump $1,121-1,275

2005 VW Golf gas (MSRP):
- injector $141-$187
- fuel pump $306

Right now 1kWh in NiMh batteries cost less than $500. Prius has 1.3kWh battery pack.

[Chromer]

And besides, we all know that gas will always be $2.50 a gallon, and the new oil the companies are finding is cheaper to recover and refine than the oil they extract now...

[Vostok 7]

Originally Posted by Chromer

And besides, we all know that gas will always be $2.50 a gallon, and the new oil the companies are finding is cheaper to recover and refine than the oil they extract now...

Except that Diesel is almost always cheaper than gasoline. There was only that rare instance last year.

Vostok 7

[darknightohio]

Originally Posted by Vostok 7

Except that Diesel is almost always cheaper than gasoline. There was only that rare instance last year.

Vostok 7

Diesel is more expensive right now...

[Scrotus]

Originally Posted by darknightohio

Diesel is more expensive right now...

Before or after taxes?

[Kubek]

At the pump? Retail customer price always include tax.

[SLegacy99]

Originally Posted by Scrotus

Pointless redundant information that everyone with half a brain already knew. Even hybrid owners knew it already. You don't buy a hybrid because it makes financial sense -- you buy it to make a statement. That it costs a premium to do so just sweetens the deal. Just look how committed to the environment you are...

Both diesels and hybrids command a premium. However, the Premium of the Prius can be paid off in a few years of driving, whereas the premium of the feature packed Jetta TDI will take you nearly ten years vs. if you bought a base Jetta.

Hybrid buyers do buy for financial sense. What this article fails to mention is that hybrid owners benefit from fewer maintence trips as well as brakes that last 6 times the length of normal ones. What it still comes down to is how you drive your car.

Personally, I'd prefer the quick, 30 MPG RX450h to the nimble, but not quick, 23 MPG X35d.

Unfortunately, the diesel vehicles being sold in America are not easily available to the diesel buying public. The 335d cost way more than a 335i and will take over ten years to recoup the cost. BMW should get serious in the U.S. and give us diesel 3 series that can pull some serious mileage and that doesn't cost so much. Lexus also nows how to play the game as evident by the new RX and HS sedans. Once they add their exhaust gas recovery system and tweaked batteries to the GS hybrid, well I think it will be a car that can do 28 MPG Hwy and yet still hit 60 MPH in under 5 seconds.

[SLegacy99]

Originally Posted by Vostok 7

Except that Diesel is almost always cheaper than gasoline. There was only that rare instance last year.

Vostok 7

I can speak from living on the East coast for 20 years that diesel has been more expensive than gas for 10 of them.

[Chromer]

Originally Posted by SLegacy99

BMW should get serious in the U.S. and give us diesel Mini.

Fixed.

[Kubek]

Originally Posted by SLegacy99

BMW should get serious in the U.S. and give us diesel Mini.

For that kind of money, You could get 2010 Prius.

[Eby]

Originally Posted by Kubek

In 80's, 2 liter diesel had ~70hp. Right now 2 liter diesels have ~140-200hp. I won't expect them to last as long as old MB's.

Also, diesel is only good as long it's covered under warranty.
For example,
2005 VW Golf desesl (MSRP):
- injector (ONE) $263-$318
- fuel pump $1,121-1,275

2005 VW Golf gas (MSRP):
- injector $141-$187
- fuel pump $306

Right now 1kWh in NiMh batteries cost less than $500. Prius has 1.3kWh battery pack.

2nd generation Prius battery: $2,588.67
2nd gen Prius battery control module: $696.91
2nd gen Prius inverter: $3,636.75
Couldn't find a price on the 1st gen Prius battery, but the controller for that model was $1,031.98 and inverter $3,268.99.

On top of all that hybrid stuff, you've got regular gas engine components to replace as well.

Nobody talks more **** about diesels than hybrid owners/fans, I don't know why. If the real reason they bought a hybrid was to help the environment you would think they'd be in favor of any technology that saves fuel. Since this obviously isn't the case, I suspect they are more interested in the trendiness of "going green" than actually being environmentally friendly. Hybrids are a lot trendier than diesels, I'll give you that.

[Kubek]

It's because no one cares how much insurance pays Toyota for replacement module.
Right now You can go on ebay and buy 1kWh NiMh batteries for $600 shipped to Your doors. I bet that it cost Toyota much less to build battery for Prius. Maybe in couple of year's we will see aftermarket batteries like for your cellphone right now.

Originally Posted by Eby

On top of all that hybrid stuff, you've got regular gas engine components to replace as well.

I would worry less for the underpowered, naturally aspirated gas engine, than for modern diesel engine which makes 2 or 3 times more power than 20 years ego.

[Lantec]

Originally Posted by Kubek

I would worry less for the underpowered, naturally aspirated gas engine, than for modern diesel engine which makes 2 or 3 times more power than 20 years ego.

You can say the same for gasoline engines... Didn't the Mustang have some 5L V8 that only made like 200hp?

[jo151]

That has to burn for those who paid MSRP or above when hybrids were in demand.

[SLegacy99]

Originally Posted by Eby

2nd generation Prius battery: $2,588.67
2nd gen Prius battery control module: $696.91
2nd gen Prius inverter: $3,636.75
Couldn't find a price on the 1st gen Prius battery, but the controller for that model was $1,031.98 and inverter $3,268.99.

On top of all that hybrid stuff, you've got regular gas engine components to replace as well.

Nobody talks more **** about diesels than hybrid owners/fans, I don't know why. If the real reason they bought a hybrid was to help the environment you would think they'd be in favor of any technology that saves fuel. Since this obviously isn't the case, I suspect they are more interested in the trendiness of "going green" than actually being environmentally friendly. Hybrids are a lot trendier than diesels, I'll give you that.

Find me even one person who has to replace their battery pack, until then...

[Vostok 7]

Originally Posted by SLegacy99

I can speak from living on the East coast for 20 years that diesel has been more expensive than gas for 10 of them.

But on the east coast where people live closer together and you do a lot of city driving, Hybrids make sense.

Here in the west (or the southwest or the mid west) unless you live in a city (and sometimes even if you do live in a city), you have to do LOTS of highway driving to get anywhere. Combine that with the fact that historically diesel has always been less expensive than gasoline and you have a strong argument for the diesel. Diesels tend to get better gas mileage on the highway than a comparable hybrid, but lose a little in the city against the hybrid.

I would never buy a hybrid. Where I live, it just wouldn't make sense. I mean, I have to drive 25 miles both ways on a highway just to get to a Taco Bell for heaven's sake. Not to mention diesel's been consistently about 10-20 cents cheaper than regular gasoline here.

Vostok 7

[Eby]

Originally Posted by SLegacy99

Find me even one person who has to replace their battery pack, until then...

Just 1?
http://priuschat.com/forums/gen-ii-p...brid-cell.html

But hell, the battery is cheap compared to the inverter. How about 1 of those too?
http://priuschat.com/forums/gen-ii-p...ont-start.html

[mnm3_8]

Originally Posted by RichM

IMHO, diesel makes sense for people that have steady speed highway commutes (I happen to be one of these). Hybrids make sense for people that deal with stop and go traffic. Both can exist together (My brother happens to be this type).

But.... bring out the haters, on both sides.


Go Diesel

Hm, my GAS powered Chevy gets better mileage than any of my friends diesel powered, identical trucks........until we start to haul something. Dragging our boats to E. Wash, theirs hardly drops, while mine plummets quite a bit more. The diesel/hybrid argument is really dependent on so many variables that it's difficult to quantify.