Frugal Motoring – Diesel Curse

The adage goes that you should write about what you know. While I continue to learn about investing I’ll blog about frugal motoring.

In the last few months there’s been lots in the news about diesel cars. Since ‘diesel-gate’ (what will it take for lazy journalists to stop adding -gate to things? Door-gate? Gates-gate?) their social popularity stock has been in free fall. Suddenly they’re very out of fashion, and the Daily Mail warns us that many nuns and kittens will die if you buy a diesel. Should you be concerned?

Motoring fashion

The rise of diesel cars as a proportion of total sold really took off in the ’90s and early ’00s. Prior to this diesel engines were the preserve of commercial vehicles; loud, clattery, generally large displacement and utilised for their torque curve. In the late 1980s and early 90s manufacturers began to make smaller displacement, less tractor-ish engines. This was largely possible due to a spread of direct injection and common rail technology, bringing more refined efficient running. These found their way into a wider variety of cars including corporate high end models. Engines like the Peugeot XUD, VAG 1z/ AHU/ AAZ/ PD and Mercedes OM60x series spread the word. Reps doing mega-mileage sang the praises of the fuel efficiencies and reliability of these donks.

Diesel had it’s golden age. Emissions concerns in the 00s pushed manufacturers to reduce harmful large particulate output (the old diesel smokers) while at the same time increasing efficiencies. Turbos, diesel particulate filters (DPF) and exhaust gas recirculation (EGR) were born. Diesel engines spread across consumer car ranges and people were seduced by their quoted MPG figures (leading to low tax brackets).

Emissions controls

The combination of emission controls and the spread across consumer car ranges lead to people using diesel cars who previously wouldn’t. Cars got heavier due to increased safety features all while tax incentives towards high efficiency vehicles continued this push. It was now people doing 5,000 miles/year as well as those doing 50,000, and so issues began. Engines were built for higher combustion pressure using tighter tolerances. Diesel engines are more efficient when up to temperature, and EGR/ DPF function best with long duration moderate RPM runs. The short distance, short duration journeys of those moving from little petrol cars to little diesel cars couldn’t produce the sustained RPMs required. Oil barely had time to warm up and lubricate the tight tolerances. People began to complain that their cars were not as efficient as expected, or not as reliable, or were doing DPF regen too frequently. Clouds gathered on the horizon.

Diesel-gate

It became difficult to develop engines that could meet the power/ weight/ efficiency/ emissions demands of the population and government with current technology. Some manufacturers built engines with tight tolerances that met standards at the expense of reliability (see Renault/ Nissan’s DCI). Others reduced displacement, upped boost pressure or used AdBlue (urea injected into the exhaust system, made from pig urine). VAG clocked that international emissions testing systems were always run a certain way, and therefore developed a programme in the cars ECU to detect when the car was being tested and tune for emissions at the detriment of performance. They were found out, and how the hysterical tabloids shrieked with indignation. Imagine that, a large corporation finding a way round government law and not telling the public!

At the same time scientists began to measure and report the elevated toxic levels of NOx and very fine particles that the new diesel engines chucked out. Those new diesels weren’t so clean after all, they had just changed from visible smoke to tiny invisible particles. A tipping point was reached.

Double standards

That brings us to now. The government, ever the one to follow the will of the people (shriek of The Sun/ Mail), has started to roll out new rules. Among these include that any Engine Management Light on, removal of Diesel Particulate Filter or Exhaust Gas Recirculation will be a fail come MOT time. This affects all car owners, but particularly diesel owners, where second hand owners replace or remove DPFs/ EGRs in pursuit of better reliability/ fuel economy (1). At the same time, the recognition of the other harmful exhaust gases has caused taxes and ultra low emissions zones to target diesel drivers (2).

I applaud the manufacturers who have managed to meet required standards. The technology (in it’s infancy 10 years ago) has matured and it is possible to have highly efficient diesels that haven’t bent the rules. Diesel is an excellent fuel for efficiency and torque.

Why does this matter to us?

Three points here. First the obvious. It will cost more to own a diesel car as tax classes change in the future. You may get stung with a hefty bill when you go for an MOT and find out that secondhand BMW 116d is missing it’s DPF. Manufacturers are also changing engines to make them meet new emissions standards, but in some cases this is worsening performance or MPG. Many new diesels aren’t meeting advertised MPGs in real world environments as the listed MPG figure is from a rosy scenario.

Additionally, you may have received a letter from the manufacturer asking you to bring your car in for a ‘fix’. VAG are the big name for this. I would think very carefully before getting the ‘fix’. Pistonheads (the car forum for powerfully built company directors driving shiny cars in shiny suits) is full of very interesting threads documenting experiences with their ‘fixed’ cars (3).

Second, broader, point is about the knock on effect on the UK economy. We may no longer be the British Leyland industrial powerhouse nation, but many thousands of jobs across the UK rely upon the motor industry. The UK retains a reputation for high-tech manufacturing. Many of the manufacturers who have done well out of the rise of diesels produce the cars and engines in the UK (4). The fall in demand has resulted in a fall in production volume, and jobs are being lost (5, 6, 7). It remains to be seen what will happen, but it’s unsettling to note the government not supporting manufacturers producing alternatives.

Third and final point and the one I see less writing about; diesel residuals. For the past 5-10 years people have been buying diesels, lots on PCP or finance deals, expecting when they come to sell or hand back the car will be worth a certain amount. That amount may no longer be what was expected. For the owner it’s a painful lump to swallow. For finance companies with hundreds of diesel cars on file, it’s a much bigger financial black hole. More on this another day.

I have a diesel, what should I do?

You’ve just bought your Vauxhall Insignia CDTI using a bank loan. You do 20k a year chugging around motorways, and find the car comfortable.

Probably nothing.

Check where you stand for MOT changes then drive your nice car.

Diesels remain an excellent engine choice if you’re doing high mileage where the torque and MPG show. Soporific sensationalist journalism doesn’t change it’s utility.

I continue to drive a 25 year old diesel. It’s loud, smelly, noisy and chucks out clouds of clag. It costs very little to service, very little to tax and can theoretically run on vegetable oils for maximum environmental offset.

Car purchases will be the biggest lump sum spend after a property, so always analyse engine choices pre-purchase. Don’t be swayed by government incentives which may change with the government’s mood.

Next time on Frugal Motoring: The PCP Black Hole

Yours,

The FIRE Shrink

References:

  1. https://www.theguardian.com/money/2018/apr/14/mot-changes-strict-tests-diesel-cars-fail
  2. https://www.bbc.co.uk/news/amp/business-43655703
  3. https://www.pistonheads.com/gassing/topic.asp?h=0&f=86&t=1589780
  4. https://www.theguardian.com/business/2018/mar/05/diesel-uk-car-sales-fall-petrol-electric
  5. http://www.bbc.co.uk/news/business-43885516
  6. http://www.bbc.co.uk/news/business-43841922
  7. http://www.bbc.co.uk/news/business-43756202
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