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CMU study concludes diesel and hybrid vehicles can retain more value than PFI gasoline vehicles despite higher new car price

A new Carnegie Mellon University study released at the Washington Auto Show finds that for passenger cars, aadvanced vehicles with higher fuel economy—i.e, turbocharged direct injection diesels or hybrids—retain more value than a paired conventional vehicle—i.e., port fuel injected (PFI) gasoline—during periods of higher fuel costs.

For trucks, they also found that the diesel versions retained a greater value than the gasoline versions. The also found that future fuel savings between the diesel and gasoline engines accounted for less than 20% of the difference in the resale price for the truck. They suggested that other attributes such as performance or prestige account for this difference.

Regardless of the mechanism, they concluded, the higher resale prices justify the higher capital cost for the diesel and hybrid passenger cars and for larger diesel trucks on a total cost of ownership basis.

It’s been generally known that diesel vehicles typically post lower operating costs because of their increased fuel economy. But that’s only one element of the equation. Our study considered a vehicle’s initial price and resale value along with other operating and maintenance costs.

—Lester Lave, University Professor and Higgins Professor of Economics at CMU’s Tepper School of Business

For their study, Lave and his researchers used auction data from Manheim Auctions, a wholesale vehicle operator and Cox Enterprises, Inc., to evaluate the actual resale values of diesel and gasoline vehicles sold after 3-5 years of ownership. The team then compared resale values with the total cost of owning and operating diesel- and gasoline-fueled passenger cars and light-duty trucks.

For passenger cars, the team paired the Jeta TDI with the Jetta 5C and 4C; the Prius with the Camry sedan (an imperfect pairing); the Hybrid Civic with the Civic; and the Mercedes-Benz E320 diesel with the E350. For trucks, they used the Silverado 2500HD, RAM 2500 and Ford F250 diesel and gasoline versions.

Among the findings were:

  • The TDI diesel vehicles and the Toyota Prius retain a greater percentage of their initial purchase price than the conventional gasoline vehicles controlling for mileage.

  • For the Volkswagen Jetta TDI and the Toyota Prius compared to the similar conventional option, they observed large differences in the resale ratio of approximately +0.3 in the summer of 2008 as gasoline and diesel prices rose to record levels; when gasoline and diesel prices fell sharply in 2009, the differences fell to less than +0.1.

  • For the trucks, they found find that the diesel engines retain a higher percentage of their initial price than the gasoline options with the Chevrolet and the Dodge trucks outperforming the Ford F250. This may be due in part to the known quality problems with the diesel engine installed in this generation of Ford trucks (Truett, 2009). As cabin size increases, more trucks are installed with diesel engines. These larger diesel vehicles retain a larger portion of their total price compared to the gasoline equivalents.

  • For the Honda Civic and the Mercedes Benz E Series, the resale ratio for the advanced vehicles is higher during the 2008 period and is comparable to the conventional vehicle in 2009.

  • For the Chevrolet and the Dodge trucks, the resale ratio fell in the summer of 2008 and rose in 2009. They conjectured that the higher fuel prices in the summer of 2008 drove down the price of all trucks with a rebound in their price in 2009 when fuel prices were lower. The differences between the alternative and conventional vehicle are not as pronounced over 100,000 miles.

Lave said out that Bosch, which manufactures diesel fuel injection systems for passenger cars, light-duty trucks and commercial vehicles, underwrote the cost of the study because they wanted real-world independent research conducted in this area.


  • Elisabeth A. Gilmore and Lester B. Lave (2011) Comparing Resale Prices and Total Cost of Ownership for Gasoline, Hybrid and Diesel Passenger Cars and Trucks



This suggests that we'll see more people buying high-economy vehicles, and they'll get better resale value, if the costs of petroleum dependence (e.g. protecting the Middle East shipping routes) are internalized.

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