Calculating Fuel Economy
June 29, 2009
I recently finished reading Nudge, a decent book but not something I would highly recommend. Nevertheless, there is one idea that authors present that I found pretty interesting.
When it comes to fuel efficiency in cars and trucks, just about everyone measures it by the "miles per gallon" metric, even though it turns out to be one of the worst ways to measure fuel economy. GOOD recently had a nice piece about why "gallons per 100 miles" would be a superior metric, but even so, it still doesn't tell people the most important thing they might want to know: how much it is going to cost?
Consider the case for these four 2009-model GM vehicles: Chevy Aveo, Cadillac CTS, Chevy Suburban 1500, GMC Sierra C15. First, we'll look at the MPG (city/highway) ratings:
Aveo: 25/34
CTS: 18/26
Sierra: 15/20
Suburban: 14/20
We can convert this to gallons per 100 miles, and the numbers look like this:
Aveo: 4.0/2.9
CTS: 5.6/3.8
Sierra: 6.7/5.0
Suburban: 7.1/5.0
In this case, it seems a little more obvious how much more fuel efficient the Aveo is than the Suburban or the Sierra, but it doesn't take the next step to determine how much it will actually cost the driver. Fortunately, the EPA now calculates an estimated annual fuel cost.
Aveo: $1307
CTS: $1742
Sierra: $2152
Suburban: $2288
That's for a single year, but most people own vehicles for many years. If we multiply these values by 5 (to estimate the cost over five years), the difference becomes even more apparent.
Aveo: $6535
CTS: $8710
Sierra: $10760
Suburban: $11440
These estimates are pretty conservative, since they completely ignore inflation. Nevertheless, that variable could easily be factored into the calculation.
Sticker price is powerful for new vehicle buyers. Most probably prefer a more fuel efficient model when one is available, but the traditional MPG metric makes differences in fuel economy look minor. Only if we extrapolate out over a period of time do people become better aware of how much a certain type of vehicle will actually cost and knowing that the cost of a particular model will cost hundreds or thousands of dollars of dollars more over time could be a major game changer at purchase time.
When it comes to fuel efficiency in cars and trucks, just about everyone measures it by the "miles per gallon" metric, even though it turns out to be one of the worst ways to measure fuel economy. GOOD recently had a nice piece about why "gallons per 100 miles" would be a superior metric, but even so, it still doesn't tell people the most important thing they might want to know: how much it is going to cost?
Consider the case for these four 2009-model GM vehicles: Chevy Aveo, Cadillac CTS, Chevy Suburban 1500, GMC Sierra C15. First, we'll look at the MPG (city/highway) ratings:
Aveo: 25/34
CTS: 18/26
Sierra: 15/20
Suburban: 14/20
We can convert this to gallons per 100 miles, and the numbers look like this:
Aveo: 4.0/2.9
CTS: 5.6/3.8
Sierra: 6.7/5.0
Suburban: 7.1/5.0
In this case, it seems a little more obvious how much more fuel efficient the Aveo is than the Suburban or the Sierra, but it doesn't take the next step to determine how much it will actually cost the driver. Fortunately, the EPA now calculates an estimated annual fuel cost.
Aveo: $1307
CTS: $1742
Sierra: $2152
Suburban: $2288
That's for a single year, but most people own vehicles for many years. If we multiply these values by 5 (to estimate the cost over five years), the difference becomes even more apparent.
Aveo: $6535
CTS: $8710
Sierra: $10760
Suburban: $11440
These estimates are pretty conservative, since they completely ignore inflation. Nevertheless, that variable could easily be factored into the calculation.
Sticker price is powerful for new vehicle buyers. Most probably prefer a more fuel efficient model when one is available, but the traditional MPG metric makes differences in fuel economy look minor. Only if we extrapolate out over a period of time do people become better aware of how much a certain type of vehicle will actually cost and knowing that the cost of a particular model will cost hundreds or thousands of dollars of dollars more over time could be a major game changer at purchase time.
