Gas prices have more than doubled in the last 10 years, and they remain in constant flux. One effect we’ve seen is that the price of hybrids and diesels spike along with gas prices, then fall back to Earth whenever gas prices moderate. When fuel prices were on their meteoric rise in 2008, stories of used hybrids selling for new-car prices were common, and nearly all new hybrids came with a premium on top of the sticker price or a long waiting list.
Lately, the hybrid hype has cooled. And introductions of new diesel models in North America have been limited to a few European automakers.
But not all hybrids and diesels make financial sense, even in an era of high gas prices. Our latest analysis shows which models pay for themselves in overall owner costs—and which don’t.
Our findings show that six tested diesels can save you money no matter what fuel costs, because their depreciation and fuel costs are significantly lower than their closest conventional counterparts: the Volkswagen Golf TDI, Jetta TDI sedan and wagon, and Passat TDI, the Mercedes-Benz E350 BlueTec, and the GL350 BlueTec SUV. Buying a Passat TDI instead of the five-cylinder Passat can save you $5,000 over five years based on diesel fuel price of $3.90 per gallon and $3.60 for gas. The Mercedes-Benz GL350 BlueTec can save more than $7,000 over the same time frame.
We found that some models will cost you more to own than a conventional equivalent will at any gas price on record. For example, gas would have to cost more than $9 a gallon before you would save money by buying an Infiniti M35h instead of a conventionally-powered M37. Likewise you'd come out ahead with the BMW 335d diesel only if fuel cost more than $13.70 a gallon.
Some models weren’t clear-cut winners or losers. They may make sense for some consumers who are willing to pay a little extra in the long run to burn less gas.
Hybrid & diesel payback
In this analysis, we compared the five-year owner costs of 13 hybrids and seven diesels with those of similar conventional vehicles, using Consumer Reports' new-car owner-cost estimates. The conventional vehicles with which we compared the hybrids and diesels are the closest available alternatives when considering all factors, including performance, safety, and features. Most were compared with a similarly equipped all-gas version from the same model line. For hybrids and diesels that don’t have a direct gasoline counterpart, we chose the most similar model in price and features, from the same automaker where possible or otherwise a direct competitor.
Cost factors we considered include depreciation, fuel costs, insurance, interest on financing, maintenance and repairs, and sales tax. Of those, depreciation makes up the largest portion, a whopping 48 percent of owner costs in the first five years. We factor in depreciation, assuming that owners trade in their vehicles after five years, a typical ownership period.