Fuel-Smart Rides
How to find a new car with space, style and performance--without paying for it at the pump
By Lawrence Ulrich

(MONEY Magazine) – If you're planning on buying a car in the new world of $3-a-gallon gas, fuel economy has probably gone from nice option to deciding factor. Do the math: If you can save, say, around $1,000 a year in gas, that will equal roughly $5,000 in five years--enough for a nice down payment on a car for your kid.

It used to be that if you wanted a car that took it easy at the gas station, you were going to have to make some sacrifices: You'd squeeze yourself into something smaller than you really wanted. Or you'd find yourself behind the wheel of something really thrifty--and really underpowered. Or maybe you bought a diesel long ago but still have nightmares about black exhaust and clattering engines.

It doesn't have to be that way anymore. If oil prices have been getting you down at the dealership, check out the following four car-buying strategies. Each one is a way to drive something that is miserly at the pump but also a great ride--regardless of the price of gas.


Okay, so you need something big to haul all your stuff. That doesn't mean you need to get a gas guzzler. As the lines blur between cars, trucks and wagons, it's quite possible to find vehicles that go beyond the traditional car/truck/van categories. Most start from the idea of merging SUV practicality with car-like comfort and mileage--without copying the look of a traditional SUV or, heaven forbid, a minivan.

The proudly boxy Scion xB is one example. Small on the outside, enormous inside, the Toyota-built Scion is rated at 31 miles per gallon in the city and 35 on the highway, and it starts at less than $15,000. If you have more affluent tastes, Mercedes' R-Class may be the minivan you always wished someone would dream up. The stylish R-Class ditches the minivan's sliding doors but offers useful seating for six adults in three rows. Equipped with a modest 3.5-liter V-6, the R350 version managed 22 mpg in real-life highway driving, better than most SUVs with this kind of space.

And don't overlook the humble wagon, which can rival SUVs for utility and also blow them away in mpg. The Subaru Legacy is one of our favorites, with standard all-wheel drive and smooth performance. With a new and stronger 176-hp, four-cylinder base engine for 2006, it still posts mileage figures of 23 mpg city/30 highway.

The Microvan: Mazda5

Mazda5 Base price $17,995 Engine 2.3-LITER 4-CYLINDER, 157 HP EPA mileage 22 MPG CITY/27 HIGHWAY Observed economy 25 MPG Projected annual fuel cost[1] $1,650

Sure, it looks like a minivan, and it can hold six people, but keep this in mind: This car's footprint is about the size of a Honda Civic's.

The new Mazda5 mini-minivan is the U.S. version of the "space vans" that have become popular in Europe and Asia. Like larger vans, the 5 has a pair of sliding doors, here cleverly designed for easy opening and closing. The second-row seats fold forward with one-touch operation, and all four rear seats fold flat. The 5 is based on the Volvo S40 and the Mazda3, which I consider two of the sportiest, most sophisticated small cars going. That genealogy means the 5 handles more deftly than the usual big haulers, and at roughly 25 mpg in overall driving, it gets about 20% better mileage while doing it.

Other Shape-Shifters

Scion xB Base price $14,680 Engine 1.5-LITER 4-CYLINDER, 103 HP EPA mileage 31 MPG CITY/35 HIGHWAY

Mercedes R350 Base price $48,775 Engine 3.5-LITER V-6, 268 HP EPA mileage 16 MPG CITY/21 HIGHWAY


Europeans have been dealing with pricey fuel for years now. Their solution: cleaner diesel engines. Today's versions get 20% to 40% better mileage than gasoline engines without the notorious diesel drawbacks of old (noisy idling, tepid acceleration and smelly, sooty exhaust).

In the U.S., new diesel models include cars from Mercedes-Benz, Volkswagen and Jeep. They tend to cost only about $1,000 more than their gasoline equivalents--a lot less than the $3,000 to $6,000 premium that hybrids usually command--but they still serve up large amounts of torque and acceleration, giving you gas-like performance at hybrid-like efficiency. (The price advantage gets even better in 2006, when diesel buyers will qualify for a tax deduction of as much as $3,400.)

The downside? Diesels still produce more soot than gas engines, so the states of California, New York, Maine, Massachusetts and Vermont prohibit their sale (but not their ownership or operation). That will change soon: Next year pumps will start dispensing a newer formulation of diesel fuel that burns cleaner, and after 2007 all diesels will have to meet the same toughened emissions rules as any gasoline model.

Premium Economy: Mercedes-Benz E320 CDI

Diesel vehicles used to be an option for the frugal, but now they've also gotten fancy. Powered by a turbocharged six-cylinder diesel, the E320 CDI was as comfortable, swift and sumptuous as the gas-powered E350 sedan, yet it posted 39 mpg on the highway, almost 50% better than the E350. Europeans have been driving diesel Benzes and BMWs for years, but the Benz now gives Americans a luxury sedan that sips fuel like a compact. The E320 doesn't skimp on amenities either, from its leather interior to its optional DVD-based navigation system and radar-based parking sensors. Add to that the greatest luxury of all: The diesel E can travel approximately 650 miles between fill-ups, which means going to the gas station only 25 times a year.

92% of respondents to a MONEY/ICR poll said it's important to them that the next car they buy be a fuel-efficient one.

More Diesel Options

Jeep Liberty CRD Base price $25,710 Engine 2.8-LITER TURBODIESEL 4-CYLINDER, 160 HP EPA mileage 21 MPG CITY/26 HIGHWAY

VW Jetta TDI Base price $22,980 Engine 1.9-LITER TURBODIESEL 4-CYLINDER, 100 HP EPA mileage 35 MPG CITY/42 HIGHWAY

FUEL-EFFICIENT STRATEGY 3 Get a Smaller Second Car

Fine, so you need an SUV, a pickup or a minivan--but do you really need two? Instead, round out the family fleet with a smaller, more economical car that's perfect for commuting and for doing errands around town, which take the biggest toll on economy.

Sure, hybrids get all the press, and most excel in mileage. But gas-only cars like the Toyota Corolla can deliver close to 40 mpg on the highway as well. Choose a compact hatchback such as the Mazda3, Ford Focus or Audi A3, and you'll be amazed at its versatile space. Even a mid-size sedan or wagon will whip a big SUV at the pump.

Still not convinced? Let's run the numbers. Say your second car is a Jeep Grand Cherokee V-8, and you drive 15,000 miles a year. At about 17 mpg overall, you'll spend more than $2,400 a year to satisfy its fuel craving. Switch it for the all-new 2006 Honda Civic Hybrid, at a real-world 46 mpg, and your annual fuel bill stays below $900. You save more than $1,500 and use 550 fewer gallons of gas every year while contributing near-zero emissions. Over three years, that's an extra $4,500 in your pocket--on top of the $10,000 to $20,000 you save by choosing a compact sedan over a typical mid-size SUV.

Power to the People: Honda Civic Hybrid

In my testing, the new Honda delivered a knockout 46 mpg overall, making it the most economical car I've ever tested (and yes, that includes Toyota's Prius). Unlike every other hybrid I've driven, the Civic nearly achieved its estimated EPA city rating of 50 mpg: I saw 49 mpg in my real-world city driving, and it tallied 44 mpg on the highway.

The Civic is a tad slower off the line than the Prius, yet it has more direct steering and wanders less at highway speeds. The low-rolling-resistance tires still squeal a bit too easily in turns, and the regenerative brakes--which return energy to the hybrid battery--don't feel as natural as a typical car's but aren't bad.

Perhaps most important, the Civic's price should undercut a comparable Prius' by around $2,500. If saving money is the ultimate goal, that's nearly three years' worth of free gasoline for the Honda buyer.

Honda Civic Hybrid Base price (est.) $20,000 Engine 1.3-LITER 4-CYLINDER WITH 15-KILOWATT ELECTRIC MOTOR, 110 HP EPA mileage (est.) 50 MPG CITY/50 HIGHWAY Observed economy 46 MPG Projected annual fuel cost[1] $897

Jeep Grand Cherokee V-8 17 mpg $2,426 Annual fuel cost[1]


Honda Civic Hybrid 46 mpg $897 Annual fuel cost[1]

Other Big Small Cars

Audi A3 Base price $26,940 Engine 2-LITER TURBO 4-CYLINDER, 200 HP EPA mileage 25 MPG CITY/31 HIGHWAY

Mazda3 Base price $15,170 Engine 2-LITER 4-CYLINDER, 135 HP EPA mileage 26 MPG CITY/34 HIGHWAY


The average fuel economy of cars on American roads today is no better than 25 years ago. Why? Two big reasons: Americans switched en masse to heavier, thirstier light trucks, and the average vehicle has nearly doubled its horsepower. Bottom line: Consumers have voted for size and speed over economy.

That means more economy is yours for the taking if you're willing to settle for a bit less power. Many cars and trucks today offer a choice of engines. Choose a four-cylinder over a six, or a six-cylinder instead of the V-8. Technologies such as variable-valve timing are making the best four- and six-cylinder engines incredibly smooth and surprisingly quick (unless your daily commute includes the autobahn, they have more power than anyone could reasonably need) while still delivering two to five more miles a gallon than their larger versions.

Not only will you save at the pump, but you'll also leave the dealership with a lot more cash in your pocket. Efficient six-cylinder versions of top luxury cars--such as the Audi A6, BMW 5-Series, Infiniti M35 and Mercedes E-Class--cost $6,000 to $10,000 less than their thirsty V-8 counterparts and still have plenty of juice for passing, merging or just plain showing off.

Small Engine, Big Value: Toyota Camry

The four-cylinder Toyota Camry pays off at the pump and the dealership. As with many of my favorite family sedans, lower payments and lower fuel bills are why four-cylinder cars perennially outsell sixes. The Camry LE four-cylinder sips fuel at 34 mpg on the highway. That's more than a 20% advantage over its six-cylinder equivalent.

The Camry offers more than 118 cubic feet of interior volume, making it one of the roomiest sedans on the road, and its huge 16.7-cubic-foot trunk matches those of many full-size cars. Since it's relatively unchanged from last year's model, the Camry also has one of the best reliability records in the business. Is the 190-hp six-cylinder quicker off the line? Well, yes, but Toyota's 154-hp four-cylinder certainly doesn't feel underpowered, and it's impeccably quiet and smooth. And since I'm talking about a Camry and not a Corvette, I doubt most people would miss the extra horsepower.

Cost-Effective A six-cylinder Camry costs more both at the dealer's lot and at the pump. Here's how it breaks down.

Extra cost at purchase $2,405 Extra cost after five years[1] $4,140 Extra cost after 10 years[1] $5,875

More Cylinder Savers

Infiniti M35 Base price $40,640 Engine 3.5-LITER V-6, 280 HP EPA mileage 18 MPG CITY/25 HIGHWAY

BMW 530i Base price $48,770 Engine 3.0-LITER 6-CYLINDER, 255 HP EPA mileage 21 MPG CITY/29 HIGHWAY

NOTE: Fuel-cost estimates based on $2.75-a-gallon gas and 15,000 miles driven in a year.