Study Shows Hybrids and Diesels Retain More Value Over Time

A new Carnegie Mellon University study released last week reveals that hybrid and diesel-engine vehicles are a better value compared to vehicles with gasoline engines.

The economics of hybrids and diesels are commonly evaluated based on their purchase price—on average higher than comparable gas-powered cars—compared to savings on fuel during their use. Retention of value—in terms of higher resale value—can skew the economic benefits in favor of alternative fuel-efficient cars, such as hybrids, diesels and electric vehicles.

The Carnegie Mellon researchers compared the Volkswagen Jetta TDI with the Jetta 5C and 4C; the Toyota Prius with the standard Toyota Camry sedan; the Honda Hybrid Civic with the conventional Civic; and the Mercedes-Benz E320 diesel with the E350.

The Jetta TDI and Toyota Prius came away as clear winners in terms of retaining a greater percentage of their initial purchase price. The study was underwritten by Bosch, a leading manufacturer of diesel technology, and was conducted by researchers at CMU’s Tepper School of Business. Researchers used auction data—provided by Manheim Auctions, a wholesale vehicle operator—for vehicles sold after three years of ownership.

Bosch obviously wanted third-party validation that clean diesel cars are a smart consumer choice. But the study also confirmed that hybrids, like the Prius, provide a similar resale benefit. This was especially true in summer of 2008, when gas prices spiked. It was also true—although to a lesser degree—when fuel prices dropped in 2009.

Gas and diesel prices are on the rise again in 2011, and are forecast to continue climbing in the coming years. This trend supports the economic argument that fuel efficiency is a desirable vehicle feature that will retain its value for today’s car buyers.


  • Lad

    I think as soon as the price of BEV batteries comes down, the resale price of EV cars will rise above that of the current used car leaders.

  • Yegor

    Here is the most detail study on Cost of Ownership with the specific numbers from Vincentric (the company that provides state by state Cost of Ownership data to major car manufactures – Ford, GM, Toyota, Audi, Mercedes-Benz). Hybrids are doing very well.

    http://www.vincentric.com/Home/IndustryReports/HybridAnalysisOctober2010.aspx

  • Anonymous

    Japanese news media report that: “Toyota Motor Corp.’s Prius hybrid surrendered its leadership in Japan’s passenger car market in January for the first time in 20 months …”

  • Capt. Concernicus

    @ Anonymous,

    What’s your source? Or should I say where’s the link to your source?

  • DownUnder
  • JJJ

    Jan car sales are out. Truck sales have gone through the roof. Car sales are down.

  • Anonymous

    The Hybrid analysis is bogus and false.

    How can they compare Prius to Corolla when Prius has 22 cu ft and Corolla has 13 cu ft.

    Parallelly Insight has 16 cu ft while Civic has 13 cu ft.

    These analysis were promoted by Oil companies to discourage the hybrids.

    Why are they combining all Hybrids together. 50 % of the Hybrid sales are Prius and it has only $4,000 premium over Matrix which is another 5 door vehicle.

    Those Hybrids like ML450, X6, LS456hl their combines sales are not even 20 units in Jan-2011. Soon they may disappear from the market.

  • Anonymous

    Hello JJJ

    “Truck sales have gone through the roof”.

    Biggest segment in the Trucks are the CUVs built on Car chassis. They have eaten into the sales of both Cars & SUVs. Of late, even smaller CUVs like Mini-Countryman and Nissan-Juke are coming and all these have a good mileage.

    So overall the mileage is improving.

  • Monthly Car Lease

    I am not surprised that a Hybrid holds more value over time, but it does cost more to begin with. I wonder what the Residual Value of hybrids looks like based on the average of similar cars it compares to, ie the Honda Civic vs. Honda Civic Hybrid?

  • tapra1

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