How to shop for a fuel-efficient car
Keeping fuel economy in mind early can make a big difference.
By Peter Valdes-Dapena, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - If you're shopping for a more fuel-efficient car, you need to get a handle on what poor fuel economy really costs you. And you'll need to take a hard look at what you actually need in a vehicle.

If fuel economy is important to you, you'll need to keep it in mind early in your decision process. Once you've settled on a specific make and model, most choices you make will have only a slight effect on fuel economy.

Photo GallerylaunchSee more photos

You might want to consider a gas-electric hybrid vehicle. If you do, you should make that choice for reasons other than saving money.

A hybrid car or SUV will burn considerably less fuel than a non-hybrid version. It shuts down its gasoline engine whenever it stops, making it quieter and more relaxing to drive in city traffic. However, according to various calculations, hybrid cars are not cost effective, on a purely financial basis, because they add more in cost than they save in fuel, even when factoring in federal tax credits.

Another option, of course, is to consider whether you could get by with a smaller vehicle to begin with.

Be aware of all your options

If you've decided you need an SUV, for example, ask yourself why. If you need the storage flexibility to occasionally haul large items, don't forget that there are other options.

"Most people I know who drive SUVs use them as large station wagons," said Jack Nerad, editorial director for Kelley Blue Book's KBB.com Website.

So why not just buy a station wagon? There are plenty to choose from these days and they generally get better mileage than SUVs

If it's for the sake of getting all-wheel-drive, there are many cars today that offer that as an option. And, if you live in an area where it snows only occasionally, new technology like electronic traction control and stability control offer improved handling and traction in snow without the added weight and complexity of all-wheel-drive.

If you still feel you want the flexibility of an SUV, that doesn't have to mean getting a gas-guzzling behemoth. The so-called "crossover" segment of car-based SUVs has expanded enormously in recent years, meaning that you can probably find something with reasonably good fuel economy.

Fine tuning

In most cases, choosing different engines and transmissions on the same vehicle will make slight differences in your fuel economy. For example, on vehicles with several different engine options, getting a smaller engine -- a V-6, for example, instead of a V-8 -- will usually get you about two miles per gallon better fuel economy, as estimated by the EPA.

Forgoing all-wheel-drive or four-wheel-drive on a car or SUV will gain you about one mile per gallon in fuel economy by EPA estimates.

How much money that ultimately means depends on the vehicle and, of course, on fuel prices. If gasoline costs about $3.00 per gallon, a one mile per gallon difference in fuel economy will save you about $90 to $150 a year in fuel costs. The difference in annual fuel cost will be larger for vehicles that get poorer fuel economy, like large SUVs, since that extra mile per gallon will mean more in percentage terms.

For some items, like a larger engine or all-wheel-drive, the extra fuel costs will be added to the higher initial cost for the vehicle and higher insurance costs. So, if you can get by with a slightly more fuel-efficient powertrain, it may pay off financially in more ways than just at the gas pump.

Consider other costs

On the other hand, some decisions made for the sake of fuel economy can cost you more in other ways. For example, you might save fuel by getting a stickshift transmission rather than an automatic. But, because automatic transmissions have become very efficient, the savings are slight, usually about one mile per gallon, according to EPA estimates.

Depending on how you drive, the stickshift may actually be less efficient in real-world driving. If you always rev the engine for maximum power, you're burning more fuel than you would have with an automatic transmission. (See correction)

Also, when it comes time to trade in or sell that car, the stickshift version will probably be worth much less, said Nerad. Except for sports cars, cars with manual transmissions are harder to sell in the used car market. So any amount saved on fuel would be more than wiped out at trade-in time.

The same can go for small engines. While getting the smallest possible engine will save you money in several ways, including a lower price for the vehicle and lower insurance costs, you should consider the effect it will have on the vehicle's resale value. Getting an underpowered engine in a car can make it harder to sell later, ultimately costing you thousands of dollars.

Correction: An earlier version of this story incorrectly implied that downshifting (also called engine braking) uses fuel. In modern cars, however, it does not. We regret the error. (Back to story)

Related:

Best cars with great gas mileage

Edmunds.com: Top 10 SUVs with lowest cost to own

Edmunds.com: Top 10 most fuel-efficient SUVs

Feedback Top of page

Photos and details
NEW CARS
USED CARS
YOUR E-MAIL ALERTS
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.

Or, visit Popular Alerts for suggestions.
Manage alerts | What is this?

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.