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5 good reasons to buy a diesel

(MoneyWatch) In the race for better fuel mileage, hybrids and plug-in electric vehicles get the most attention. But the introduction this year of the Chevrolet Cruze Turbo Diesel -- the first modern diesel sedan from a Detroit-based company -- is bringing new focus to the advantages of these engines.

The 2014 Cruze diesel model has an EPA highway mileage rating of 46 mpg -- the highest of any nonhybrid car. General Motors is aiming the diesel Cruze to compete against the already-popular Volkswagen Jetta TDI diesel model -- one of several VW diesels. But Volkswagen may welcome the competition. "Cruze diesel could bring more awareness of the advantages of clean diesel technologies, which would benefit Volkswagen and their much more extensive lineup of diesels," says analyst Tim Fleming of Kelley Blue Book and its web site

Previously, most diesel models sold here came from Volkswagen and other German brands -- BMW, Mercedes-Benz and Audi -- which were already selling diesel models in Europe. But with high diesel mileage aiding the companies' drive to meet toughening federal MPG standards, other companies beyond General Motors are joining the diesel parade. Mazda is introducing a diesel version of the Mazda6 for 2014, and Chrysler Group is adding a diesel engine choice to its Jeep Grand Cherokee SUV and to its light-duty Ram pickup.

If you are car shopping, you likely want to know whether diesels make economic sense. Diesel models cost more than their gasoline counterparts, and diesel fuel costs more at the pump ($3.88 a gallon recently vs. a national average $3.63 for regular gasoline). But diesel engines typically deliver 15 to 30 percent higher mileage compared with gasoline equivalents, and diesel models retain a higher resale value -- helping to offset the initial cost.

GM is offering just one Cruze Diesel model -- fully loaded with features at $25,695. The automaker says that is about $3,000 more than a similarly equipped gas model. The EPA estimates annual fuel costs for the diesel at $1,750 and a comparable gas model at $2,050.That would require a payback period of 10 years in gas savings to offset the extra cost. But EPA figures are based on EPA's assumption of typical 55 percent city driving and 45 percent highway. If you do more highway driving, the diesel fuel cost should be lower.

With the Volkswagen Jetta, the payback period is not as long. Considering the $2,635 premium price for the diesel and $400 diesel cost savings a year, the payback period would be just over six years.

Here is a closer look at the reasons you might consider a diesel model the next time you shop for a new car:

  • 1. Higher highway mileage. Unlike the experience with most cars, reviewers often record higher MPG in highway cruising than the EPA ratings. If you have a long commute without much stop-and-go traffic or travel frequently by car, a diesel may make sense.

  • 2. Greater range. If lengthy road trips are your style, a diesel will keep you from wasting much time in crowded filling stations. In all-highway driving, the Cruze Diesel could clock some 700 miles before refilling the tank.

  • 3. More robust performance. These turbocharged diesel engines generate plenty of torque even at highway speeds, making it easier to pass or to get up to speed from an entry ramp. Most hybrids suffer in this department.

  • 4. Higher resale value. Diesel vehicles have the best resale values, according to ALG, a firm that projects used-car values for use in leases. For instance, a three-year old Volkswagen Golf has a value of 61 percent of its original price, while a diesel model would be worth 65 percent of its new car cost.

  • 5. Strong towing capacity. If you use an SUV to tow a boat or trailer, a model such as the diesel Jeep Grand Cherokee is ideal. It is rated to up to 7,400 pounds -- the same as the V-8 gasoline model but with better MPG.

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