Question about diesels

[dhay13]

Hello all. My son started a new job a few weeks ago and got a company truck. It's a 2018 Silverado 1500 Z71. He has a company fuel card and the truck is his to drive just about anywhere. However, he has the option of using his own truck and they would give him about $1600/month towards it and he would still get to use the company fuel card. He has had the truck for 3 weeks and has put 2000 miles on it already. He is thinking about buying his own truck (he has a 2017 WRX now). With the amount of miles and wear and tear he is thinking a diesel would be the better option. We know virtually nothing about diesels so that is why I'm here. He is figuring if he buys his own then he could pay it off in about 3 years given the $1600/month they give him plus the $450/month he would free up by getting rid of the WRX ($50-60,000 range for the truck). At the end of 3 years it would likely have about 90,000 miles on it and probably be worth about $30,000? So he would net about $10,000/year profit off it (he would have a $30,000 asset). I also told him to get an extended warranty so it is covered (at least the drivetrain) for the 3 years or so he has it (up to 100,000 miles). I would think a 3 year old gasser with 100,000 miles would lose quite a bit of value?

I guess my main questions are is it justifiable to get the diesel over the gasser given this scenario? What is the standard powertrain warranty on a diesel? How much would an extended warranty that would cover up to 100,000 miles on a diesel?

The other question is what about buying a 5 year old diesel with maybe 70,000 miles? Would that be a bad idea based on no warranty and all the additional miles he would be adding? In this scenario he could probably pay it off in a year (probably $25-30,000 range?). After it's paid off trade it on a new one so his payment would be lower with the trade in. He will be lucky to break even on trading his WRX in as it is brand new and being a fresh college grad he had no down payment. The used truck scenario would let him build equity in the truck to use as a down payment on a new one.

His current plan is to keep the company truck for about 6 months and save up some money then make a decision but if he goes the used truck route he could do that sooner.

 

[Ratket]

Well obviously he isn’t towing.
I would go with a Gas 3/4
Ton and a Lifetime warranty.
Mopar has a Max care lifetime warranty on their gas motors. As long as it is in the original owners name it is covered. Mileage and length of ownership doesn’t matter. I wouldn’t buy a diesel just to drive “ actually I would. On someone else’s dime” but what happens if he loses that job or some unforn seen event? In any event. Now may be the time for him to trade his car and get the car of his dreams as it can sit in the garage “ Enjoy it on the weekend” while he racks on the miles on a company vehicle?
Equity in a vehicle is risky, I imagine that 1600 a month for the truck also includes maintanance and wear and tear?.. that’s a tuff call.

 

[dhay13]

Well he wouldn't be towing much but me on the other hand...lol. If we buy a a bigger boat I won't be able to pull it with my 1500. It' s only a couple of times a year so not a big deal. But as far as enjoying his car goes...well he is staying in a hotel 2 hours away and is only home Saturday night until Sunday afternoon so not much time to even drive his own vehicle (works 6 12 hour days). As far as losing his job, well that would be a risk but it is a huge company and if he is paying double payments should be able to get enough equity in it pretty quick in case he would need to trade it in in 6 months. As of now his hope is to stay there a few years and get his student loans paid down then after 2 or 3 years hopefully move on to another job where he is closer to home and working a normal schedule. He is in the Safety Management field.

He said oil changes are on the company (as well as all fuel) but he is responsible for tires, brakes, etc. If he has a warranty then tires and brakes won't amount to much maintenance wise. And the reason for the diesel would be depreciation? I would think a 3 year old gasser with 100,000 miles wouldn't be worth much but a 3 year old diesel with 100,000 would hold much more of it's value? And he could get away with a 1/2 ton but his Z71 has bottomed out a couple of times already and he said the suspension takes a beating. Maybe a Power Wagon with the 6.4? Not concerned with fuel mileage as he isn't paying for it anyway.

He could even get something a couple of years old with low miles and pay it off quicker? I jokingly told him to take my 1500 and just give me the $1600...lol. But told him I would need a vehicle. He told me to take the WRX. Yeah...no! No more sticks for me...lol

 

[SouthTexan]

Even if your son does not tow, he will still come out ahead with the diesel after 100k miles.

The diesel engine option is the only option on these truck that will pay for itself and then some through resale value and fuel economy. You will not get all of your money back and then some with any optional trim package, nav option, or optional 6.4L over the 5.7L, but you will with the diesel option depending on how much you drive and fuel costs. So you are essentially getting the added power for free.

Just do the math over 100k miles...

Diesel HD truck:
Purchase price: $50,000
Fuel cost over 100k(diesel being $3.00 and 16 mpg): $20,800
Resale 5 years later:$31,000

Total cost: $39,800


Gas HD Trucks:
Purchase price: $42,000
Fuel cost over 100K(with gas being $2.50 at 12 mpg): $25,000
Resale 5 years later: $26,000

Total cost:$41,000


These are just basic numbers and not factoring in preventive maintenance among some other things, but are roughly in the ball park of what to expect of an HD truck in terms of value. If fuel prices go up, then it will swing more towards the diesels favor and vise versa.

So as you can see, with only recouping $5k of the $8k up front cost will put you ahead at 100k when all of the diesel warranties end. And this is with diesel being $.50 higher for the full 100k miles which is generally only during the winter and is ussually about $.20 higher for most regions in the summer according to the Department of Energy data. If I would have calculated this then that would be another few thousand dollars in the diesels favor.

Also, while the maintenance of the diesel cost more at every PM, it actually comes out about the same because the maintenance intervals are much longer. The interval on the diesel is 15k miles while the gas truck is 8k miles. Which means you will only change the oil and fuel filter 6.7 times in 100k miles with the diesel versus 12.5 times in the gas truck.

 

[dhay13]

That's kind of what I was looking for. Really didn't know resale on diesels or maintenance costs. It would be under warranty but there are still regular service and maintenance costs that I am not familiar with. But he doesn't have to pay for fuel whether it is gas, diesel, his truck, or company truck so fuel cost or efficiency doesn't factor in as long as he is still working there.But yeah, with the amount of miles he will be putting on it I think the resale on the gasser is going to be pretty bad compared to the diesel.

 

[yillbs]

That's kind of what I was looking for. Really didn't know resale on diesels or maintenance costs. It would be under warranty but there are still regular service and maintenance costs that I am not familiar with. But he doesn't have to pay for fuel whether it is gas, diesel, his truck, or company truck so fuel cost or efficiency doesn't factor in as long as he is still working there.But yeah, with the amount of miles he will be putting on it I think the resale on the gasser is going to be pretty bad compared to the diesel.

I recently wen't looking for a used diesel. Ram seems to hold it's value quite a bit. I was seeing basically 70-90k mile trucks that were 4 - 5 years old still fetching over 35k here in texas. If everything you say is completely accurate, go buy the truck, pay it off, then sell it. It'll have equity in it. Quite a bit even.

 

[dhay13]

I recently wen't looking for a used diesel. Ram seems to hold it's value quite a bit. I was seeing basically 70-90k mile trucks that were 4 - 5 years old still fetching over 35k here in texas. If everything you say is completely accurate, go buy the truck, pay it off, then sell it. It'll have equity in it. Quite a bit even.

Sort of what I have seen. I saw a 2014 Chevy with 50,000 mile for $37k. Didn't notice how loaded because was just getting quick data but I would have a hard time paying $37k for a 4 year old vehicle with 50,000 miles. Similar with the Dodge and Ford. He gets a discount on Fords through his company but no idea how much. Oh, and I hate Fords and he isn't too thrilled with them either but if it is a big enough discount he might have to consider it.

 

[dhay13]

Another question...his Z71 has built in WiFi. He is out in the fields all day and has to do paperwork and submit it each day on his laptop so that WiFi comes in handy. He said he doesn't think there is a subscription but I would think there would have to be? Does Dodge and Ford have this as an option?

 

[yillbs]

Another question...his Z71 has built in WiFi. He is out in the fields all day and has to do paperwork and submit it each day on his laptop so that WiFi comes in handy. He said he doesn't think there is a subscription but I would think there would have to be? Does Dodge and Ford have this as an option?

Depends on the year, but yes, it's avialable. Though, it's going to be 3g, and it's going to cost money on ram, they don't offer it free on any of the older models ( pre 2016 ) I don't know about the newer 2017+ ones.

 

[SouthTexan]

Another question...his Z71 has built in WiFi. He is out in the fields all day and has to do paperwork and submit it each day on his laptop so that WiFi comes in handy. He said he doesn't think there is a subscription but I would think there would have to be? Does Dodge and Ford have this as an option?

2013+ trucks have it. I have a 2014 and have never paid extra for anything yet I still have 3g on my Laramie with nav package,

 

[dhay13]

Good to know. Not a deal breaker for him either way but it helps him get home earlier if he can get all of his paperwork done and submitted before he gets back to the office.

 

[Dive-Ho]

Even if your son does not tow, he will still come out ahead with the diesel after 100k miles.

The diesel engine option is the only option on these truck that will pay for itself and then some through resale value and fuel economy. You will not get all of your money back and then some with any optional trim package, nav option, or optional 6.4L over the 5.7L, but you will with the diesel option depending on how much you drive and fuel costs. So you are essentially getting the added power for free.

Just do the math over 100k miles...

Diesel HD truck:
Purchase price: $50,000
Fuel cost over 100k(diesel being $3.00 and 16 mpg): $20,800
Resale 5 years later:$31,000

Total cost: $39,800


Gas HD Trucks:
Purchase price: $42,000
Fuel cost over 100K(with gas being $2.50 at 12 mpg): $25,000
Resale 5 years later: $26,000

Total cost:$41,000


These are just basic numbers and not factoring in preventive maintenance among some other things, but are roughly in the ball park of what to expect of an HD truck in terms of value. If fuel prices go up, then it will swing more towards the diesels favor and vise versa.

So as you can see, with only recouping $5k of the $8k up front cost will put you ahead at 100k when all of the diesel warranties end. And this is with diesel being $.50 higher for the full 100k miles which is generally only during the winter and is ussually about $.20 higher for most regions in the summer according to the Department of Energy data. If I would have calculated this then that would be another few thousand dollars in the diesels favor.

Also, while the maintenance of the diesel cost more at every PM, it actually comes out about the same because the maintenance intervals are much longer. The interval on the diesel is 15k miles while the gas truck is 8k miles. Which means you will only change the oil and fuel filter 6.7 times in 100k miles with the diesel versus 12.5 times in the gas truck.

Using your numbers this is what I come up with

Diesel HD truck:
Purchase price: $50,000
Fuel cost over 100k(diesel at $3.00 and 16 mpg): $18750
DEF fluid over 100k (at $5.00 and 800 mpg):$625
Resale 5 years later:$31,000

Total cost: $38375

Gas HD Trucks:
Purchase price: $42,000
Fuel cost over 100k(Gas at $2.50 and 12 mpg):$20,833.33
Resale 5 years later: $26,000

Total cost:$36,833.33

If you don't need the extra pulling power the gas engine is more cost effective in this case .

 

[SouthTexan]

Using your numbers this is what I come up with

Diesel HD truck:
Purchase price: $50,000
Fuel cost over 100k(diesel at $3.00 and 16 mpg): $18750
DEF fluid over 100k (at $5.00 and 800 mpg):$625
Resale 5 years later:$31,000

Total cost: $38375

Gas HD Trucks:
Purchase price: $42,000
Fuel cost over 100k(Gas at $2.50 and 12 mpg):$20,833.33
Resale 5 years later: $26,000

Total cost:$36,833.33

If you don't need the extra pulling power the gas engine is more cost effective in this case .

You are correct in the numbers. I am not sure how I messed that up so bad. I generally double check, but didn't cause I was in a hurry.

However, as I stated, that was with diesel being $.50 higher that regular gas the whole 100k which isn't the case. Diesel is generally $.50 higher in the winter due to high demand of heating oil and only about $.15-$.20 higher in the warmer months. If you split these price differences in half then it would look like this. Also, DEF is only about $2.80 at the pumps which most truck stops have and most diesel owners use.

Diesel HD truck:
Purchase price: $50,000
Fuel cost over 50k(at $3.00 and 16 mpg): $9,375
Fuel cost over 50k(at $2.70 and 16 mpg): $8,438
DEF fluid over 100k (at $2.80 and 800 mpg):$350
Resale 5 years later:$31,000

Total cost: $37,163

Gas HD Trucks:
Purchase price: $42,000
Fuel cost over 100k(Gas at $2.50 and 12 mpg):$20,833
Resale 5 years later: $26,000

Total cost:$36,833


So you will be paying a whopping $330 dollar more over the course of 100k IF you only recouped $5k back of the $8K(62.5%) spent which is not typical since most recoup about 75%($6k of $8k) of that due to how well they hold their value in comparison especially at 100k miles when gas engines start to depreciate rapidly. Even if I only recouped about 62.5%, I would still gladly pay an extra $330 over the course of 100k mile for the added power. Heck, most 6.4L HD owners paid more then that for their engine upgrade from the 5.7L and said they would do it again if given the chance.

 

[dhay13]

hmmmm. Thought it would be more one sided towards the diesel given the amount of miles. Might benefit him to go with the bigger hemi then. Lower monthly payment and can pay it off quicker.

 

[SouthTexan]

I was just giving a basic example. It may vary less or more depending upon where you live as I said before. Fuel costs and trade in values will vary.

For example, my fuel costs where I live is usually $.15 difference in the warmer months and generally $.40 higher in the colder months. The trade in values where I live have a greater spread as well. Inputting my truck on Kelley Blue Book and NADA online with 100k miles gives a trade in value of $31.5k will the same truck and mileage with a 6.4L is $25k. This would put me a grand ahead at the end of 100k in the calculation above. Every location is different depending fuel costs and how well each hold their value in the region.

 

[tjfdesmo]

Are there insurance implications using his personal vehicle for business purposes? All in all, I would continue to use the vehicle they furnish, and save the money to buy my own truck for my own use, and not wear it out for someone else's benefit. My $0.02.

 

[22hemi13]

Man I’d use the company vechicle and they pay for gas. That’s free+free=FREE. Use that truck all up and buy me something for myself that I can keep forever

 

[17CrewCab1500]

I had my Cummins for 5 years and never spend $800 in DEF!

It's $11.00 at Home Depot for 2.5 gallons. I spent maybe $30 a year for it..

Diesel resale value will kill a gas. I bought mine for $42K, a dealer gave me $40K for it. I could have sold it for $45k to a private party.

 

[crash68]

I had my Cummins for 5 years and never spend $800 in DEF!

It's $11.00 at Home Depot for 2.5 gallons. I spent maybe $30 a year for it..

$800 in DEF?? that good for well over 150,000 miles towing, probably a lot more if your not. If you buy your DEF from a semi truck pumps, it's even less expensive.

 

[dhay13]

Are there insurance implications using his personal vehicle for business purposes? All in all, I would continue to use the vehicle they furnish, and save the money to buy my own truck for my own use, and not wear it out for someone else's benefit. My $0.02.

Not sure on insurance but there are probably at least 100 at his company that use their own but that is a good question.
As for the company truck, if he keeps it he doesn't get the $1600/month. He only gets that if he uses his own vehicle so there wouldn't be any saving up to buy his own then. So if he buys a truck the company would essentially be paying for it. Sure it would rack up miles and wear and tear but after 2-3 years it would be paid for and he could trade it in on a new one and have about a $30k trade in. With that much of a trade value he could probably pay that one off in under 2 years. And even using his own vehicle he gets the free fuel.

His boss and 2 co-workers all use their own trucks. He is the only one on his team not using his own