BMW slapped $4,500 rebates on its two diesel-engine vehicles, the BMW 335d sedan and the BMW X5 xDrive35d SUV, that makes them about $3,000 cheaper than their gasoline-powered equivalents. Diesels usually cost $1,000-$3,000 more. BMW calls the rebates Eco Credits and the $4,500 amount, valid through August, happens to equal the most you get out of the federal Cash for Clunkers (CARS) program, which wouldn't apply to the X5 diesel anyway since there's a $45,000 eligibility cap on the price of the purchased vehicle.

BMW X5 diesel savings. With the $4,500 rebate and an $1,800 hybrid/diesel tax credit, the 22 mpg (overall) X5 diesel is $48,375 (with shipping but none of the long list of BMW options), $3,475 less than 18 mpg the gasoline X5 30i. Driving 12,000 miles a year, the diesel uses $500 less fuel because diesel now costs the same as regular (on average), $2.50 a gallon, while gasoline BMWs need premium, which costs about $2.75 a gallon now.

BMW 335d savings. With the same $4,500 rebate from BMW and a $900 tax credit, the 27 mpg BMW 335d falls from $44,775 list to $39,375, $3,125 cheaper than the 22 mpg BMW 335i sedan. That's the comparison BMW likes. But the diesel is equally close in performance to the 23 mpg BMW 328i sedan that remains $3,565 cheaper even after the rebate and tax credit. Fuel costs would be about $500 less for the diesel than gas 335i, per year.

Sales of BMW diesels are toward the lower end of the sales expectations BMW declines to give. (Translation: BMW hasn't given solid figures but it's believed the hopes of the German automakers is that 10%-15% of model sales would be diesel.) For the X5 diesel it's reasonable, 13% of first-half sales, 1,655 diesels sold out of 13,091 total. For the 335d, it's downright low, 1%, or 487 sold out of 42,872. Overall, J.D. Power & Associates estimates 3% of new cars sales are diesels.