Department of Transportation regulations to be finalized soon will require average passenger vehicle fuel economy to reach 54.5 miles per gallon by 2025. A new study by the Consumer Federation of America shows that consumers support the new rules and are willing to pay higher car prices for more fuel efficient cars. Moreover, CFA found that savings in fuel costs outweigh the increased costs of purchasing a fuel efficient car. The key excerpt on this topic from CFA's detailed press release appears after the jump.
Analysis: Costs Vs. Consumer Benefits of Fuel Economy Technology
CFA’s new analysis of the costs versus consumer benefits of fuel economy technology shows that choosing more fuel-efficient cars consistently pays off for consumers. Using Bureau of Labor Statistics data on car prices, CFA examined how much improvements in fuel economy technology in a number of different vehicles of different sizes and classes have historically cost car buyers. CFA then compared this cost data to the savings consumers have enjoyed on gasoline costs due to increased fuel economy.
“In every case, for a variety of models, the savings from spending less on gas far outweighed the additional cost of buying a more fuel-efficient vehicle,” said Jack Gillis, Director of Public Affairs for CFA and author of The Car Book. “The results demonstrate that fuel economy is an investment that pays off many times over for consumers.”
The analysis found that a Chevy Malibu’s improvements in fuel economy over the past decade have increased the sticker price $348 compared to the 2002 price. But the typical owner who keeps the car for six years will save $2,885 in fuel costs. This translates into gasoline savings more than eight times the cost of new fuel economy technology. Similarly, a Ford F-150 pickup costs $950 more than it did in 2002 due to fuel economy improvements. The analysis found that the owner would save $5,369 in fuel costs, coming out $4419 ahead.
“Household gasoline expenditures set a record last year, reaching an average of over $2,850 annually. The consumer damage caused gas prices in recent years has been unique and unprecedented,” said Cooper. “Ten years ago, the cost of the vehicle itself was the largest single component of the cost of driving. Now, gassing up your vehicle is. This is why fuel economy is so important to consumers.”
CFA also analyzed the cost versus benefit of today’s consumer choosing a more fuel-efficient car or truck. CFA compared pairs of similar current models in which one of the models was priced higher due to its advanced fuel efficiency technology.
For example:
- A Chevrolet Cruze costs $225 more than a Volkswagen Jetta, but gets 4 more miles per gallon. The annual fuel cost savings for the Cruze driver would be $234 annually, with a break-even point at 0.96 years.
- A Scion iQ costs $55 more than a Mazda 2, but gets 5 more miles per gallon. The annual fuel cost savings for the Scion driver would be $235, with a break-even point at 0.23 years.
- A Honda Civic costs $110 more than a Mitsubishi Lancer, but gets 4.5 more miles per gallon. The annual fuel costs savings for the Civic driver would be $243, with a break-even point at a little under three months.
“In every case, the initial cost premium for better fuel economy technology was more than offset by fuel cost savings—and the break-even point came within the first two years of ownership,” said Gillis.
It is really great to hear how Malibu improved in the past decade. It is a good news on the part of its management.
Posted by: Jonathan Smith | Thursday, August 02, 2012 at 12:02 PM