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Car Fuel Efficiency Ratings May Be Misleading

With the price topping $4-a-gallon everybody wants to save gas, but depending on those miles-per-gallon ratings may be misleading.

Strange as it may sound, rating cars at gallons-per-mile may be more useful, say a pair of university researchers.

Richard Larrick and Jack Soll got to discussing fuel efficiency while carpooling to work at Duke University's Fuqua School of Business.

The professors study how people perceive things and decided to look into the auto efficiency ratings and what they tell consumers.

The result is a paper called "The MPG Illusion," appearing Friday in the journal Science.

In essence, they say, don't turn your nose up at what may seem like a small gain, it can still mean big savings at the pump.

Not everyone is a good candidate for a tiny car, Larrick explained, a family of five or six needs a larger vehicle. But moving to even a slightly more efficient large car can be a big saving, he said.

"We realized improving low mpgs is where the big bang is," Larrick said in a telephone interview. "But we realized that people were not going to understand that."

He stressed that they are not advocating buying inefficient cars, but rather pointing out that those are the ones that need to be replaced, even if the extra miles per gallon seem small.

"There are significant savings to be had by improving efficiency by even two or three miles per gallon on inefficient cars, but because we communicate in miles per gallon, that savings is not immediately evident to consumers," said Soll.

Jack Gillis of the Consumer Federation of America called their paper "extraordinarily profound in its simplicity."

The report shows that people with inefficient cars, who may feel they have no options, can experience substantial savings by just moderately increasing their fuel efficiency, Gillis said.

"I am convinced that the average, extraordinarily frustrated, owner of a fuel inefficient car has no idea that making a small improvement will save more money and will save the environment" more than a larger improvement in a more efficient car, Gillis said.

So why does it help to look at gallons per mile instead?

Well, that tells you how much gasoline is used or saved over a given distance, say a year's driving of 10,000 miles.

Gillis calculated that at $4-a-gallon, over 10,000 miles, an improvement from 12 mpg to 13 mpg would save $256. For the owner of a 33 mpg car to save that much, mileage would have to go up to 40 mpg, he said.

Here's how it works.

A couple drives a 25 mpg sedan. They trade it for a 50 mpg hybrid, a 25 mpg improvement.

A family with mom, dad and three kids has a 10 mpg SUV to haul everyone around. They trade it for a 20 mpg station wagon, a 10 mpg improvement.

Sounds like the couple did better, at least in miles per gallon.

But lets look at gallons per miles.

At 25 mpg the couple burned 400 gallons over a year and their new 50 mpg hybrid cuts that to 200 gallons. They save 200 gallons.

At 10 mpg the family's SUV burns 1,000 gallons of gas a year. At 20 mpg the station wagon burns 500 gallons — they save 500 gallons, much better than the couple.

Would it be better for everybody to switch to the most efficient car? Sure, but not every family will fit in it.