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Ram diesel payoff: does it work with cheaper gas

by David Zatz on

In February 2014, Allpar published figures showing how quickly the investment in a Ram 1500 diesel engine would pay off. Frank Gal set up the calculations.

The Ram 1500 diesel is capable of towing 9,200 pounds between the V6 gasoline engine (7,450) and Hemi V8 (11,500), and more than most trailers towed by half-ton pickups.

ALG, which calculates residual values, provided expected resale prices for the four wheel drive crew-cab Big Horn model, which they said was the most popular trim able to use all the three engines. Their estimates for resale value after three years was:

4WD Big Horn Typical MSRP Est. Value After 3 Years Net Cost
3.6 V6 $42,400 $20,500 $21,900
Hemi V8 $43,550 $22,025 $21,525
Diesel V6 $46,075 $23,500 $22,575
Engine Cost MSRP Est. Value After 3 Years Net Cost
Diesel vs 3.6 $3,675 $3,000 $675
Diesel vs Hemi $2,525 $1,475 $1,050

Diesels need periodic refills of their “Diesel Exhaust Fluid” (DEF), which is selling at truck stops for an average of $2.78 per gallon; we added $34 per year into the diesel costs. For maintenance over three years (45,000-miles), we assumed oil changes at the maximum 10,000 mile interval, but in more frequent changes could be needed. This would increase the cost for the diesel, whose oil costs more.

The gasoline V6 is the cheapest choice, largely because of higher diesel fuel prices. The V6 is cheaper than the diesel, and saves buyers around $738-$790 over three years in fuel costs alone, ignoring its cheaper maintenance.

fuel-savings

The Hemi is the most expensive option by fuel costs, though it’s the cheapest to buy; but with current low gasoline prices (even midgrade), the diesel only saves around $320-$866 over three years.

The diesel costs $2,525 more in the 4×4 Crew Cab Big Horn. If it’s traded in at three years, the overall cost is $1,050, plus interest (say, $225). With the $98 difference in maintenance costs, the gap comes to $1,373. It would take a long time for someone who does almost all highway driving to make up this difference, but a city or mixed city/highway driver should find a financial payoff in a reasonable time with the diesel… if they don’t trade in at three years (most people are keeping their vehicles far longer now.) Certainly, it should pay for itself within ten.

The diesel is likely to take less of a fuel-economy hit than gasoline engines when towing or hauling heavy loads, accelerating the time to payoff.  Gasoline prices are also likely to rise in 2016, when low-sulfur fuel comes into the picture, and gasoline price hikes, say from increased demand in China and India, or by constrictions by the Saudis and such, could make the diesel more favorable over the long haul.

Thanks to Frank Gal, ALG’s Randy Lioz, Ram’s Nick Cappa, and Blake Keithley for their assistance in this story. For various reasons, including the unknowns in resale prices for aluminum-bodied trucks, we did not include the new Ford F-series or Silverado pickups in these comparisons. 

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304


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