Friday, April 4, 2008

These Diesel Prices Are Killing Me (but I’m still doing alright)!

Two years ago, I got rid of my ’94 Toyota Camry for a nice VW Jetta TDI to take advantage of the excellent fuel economy (and torque - 250 ft-lb, heh). With the exception of taking on car payments, it was a great decision. The average fuel economy in the Camry was 23 mpg. I average about 391 mpg now, not too shabby.

The problem now is that diesel prices have skyrocketed to just over $4 nationwide. Here in Austin, the price average around $3.992, and has been steady for a few weeks. If I got to certain Shell stations to get B20 or to EcoWise for B99, the price will be much higher. So am I still seeing a benefit?

So at $3.99/gal for diesel and 39 mpg I spend roughly 10 cents/mile on fuel. If I were driving the Camry I would be paying 14 cents/mile. At 20,000 miles/year, I would spend $2046 and $2,826 respectively. This translates to $779 in annual savings. Of course, these numbers are very rough since these aren’t average prices for the year, and specific to my cars.

The takeaway point is gas would have to drop an entire dollar to $2.35 or diesel would have to jump to $5.55 for my car to be uneconomical to drive compared to the old V6 Camry. Keep in mind that this is assuming gasoline and diesel costs are not coupled too tightly, which probably isn’t a good assumption. I would need to look at price trends and determine how closely the prices follow each other. Maybe next week.

So, okay, I’m still coming out ahead. But that doesn’t mean that my driving habits will stay the same. As Dr. Webber mentioned in lecture, it takes more than efficiency to decrease fuel consumption. It has to be coupled with an increase in fuel cost, and I think we’re seeing that now. While I’m still coming out ahead, the amount that I’m paying keeps increasing.

I might not lay off the turbo, but the concept of making an extra trip to the store or to a far away restaurant is less appealing with higher fuel costs.

1Conservative estimate. It fluctuates from 36 to 42.
2Tarrytown Texaco, 4/2/08


Tom Dyson said...

I bet that the Jetta costs more to insure and costs more to maintain, in addition to costing more to start. So, are you really still coming out ahead? And if so, how many years will it take you to recoupe the cost of the diesel?

Tom Dyson said...

I mean Jetta.

David Wogan said...

Considering that the engine will run a lot longer compared to an equivalent gasoline engine, and that the premium on the car wasn't that much higher than a gas one, it's not too bad. I plan on running this car till it dies, so I'm expecting that the sturdier construction of the engine will benefit me.

I bought the car used, so a little bit of the premium was passed on to me, but I still think the payback is within a few years - very reasonable. This also without any calculations to back up what I'm saying, heh. From what I've read, it's more reasonable than some of the payback times for hybrids.

Insurance costs didn't change much from the Camry.

All good points.

Ororo Munroe said...

Good points... but what about the changes in amount of different pollutants being emitted from your tailpipe? Is diesel really better, or is this a paper vs plastic argument? We should put a cost on these emission externalities and see what the total price turns out to be.

Oh, and per your input, I ran these same numbers on my SMART... $0.087/mile at the current price of premium gasoline (conservative... I used mileage for only city driving, when I'm not worrying about how fast I accelerate).

So now comes the question... How much are the extra two seats in your car worth? Should I get a bonus because I can park in teenie parking spots? Does that fact that I only change my oil every 10k miles affect the price? What other items should be included in the true "cost" of running a car?

David Wogan said...

Emissions are definitely important, weren't included in my 'analysis'. If we're looking strictly at emissions, my car loses to gasoline and hybrids in terms. New diesels coming out will actually perform as well as or better than gasoline cars in terms of CO2.

TDI has 10k oil changes also. Add a bypass filter and it'll go +20K.

Tom Dyson said...

If you use a good synthetic oil, there's no reason any engine can't go for more than 10k miles. I'd count that as part of maintinence.

For comparison, I've gotten an average of ~$0.15/mile in my mustang since it got out of the break-in period (fuel averaging $2.87). I don't run premium though. I didn't think the fortwo needed that.

David Wogan said...

Yeah, any synthetic should last that long, but you should perform oil analysis if you run past the normal interval (to check for engine wear, iron levels, etc..). You could essentially keep the same oil and just replace the oil filter every now and then.

TDI is designed for 10k changes, but you can get by with much longer.

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