Tuesday, November 4, 2008

Invert your Gas Mileage

We are being misled in our yearnings for greater and greater gas mileage!
Yes, it came as a shock to me too… but the fact remains that bigger numbers for gas mileage aren’t an honest indication of fuel efficiency!

Consider the following thought experiment to see what I mean: say you had two cars, one that got 16 MPG and one that got 25 MPG. You can either upgrade your 16 MPG car to another 25 MPG car, or you can replace your 25 MPG car with a 40 MPG car (but not both, nor can you go from 15 MPG to 40 MPG, for some unexplained reason. Stick to the given rules.). Question: which is the better choice?

If you said “Well, I’d gain 15 MPG by going from 25 MPG to 40 MPG and I’d only gain 9 MPG by going from 16 MPG to 25 MPG…” that’s exactly the wrong answer.
Now, if you looked at car efficiency as “Gallons Per Mile” (not abbreviated GPM –that’s the official abbreviation for “Gallons Per Minute”… Let’s use “G/M”) you would clearly see the flaw in the logic… 16 MPG is 0.0625 G/M, 25 MPG is 0.04 G/M and 40 MPG is 0.025 G/M. Using those units, it’s clear that changing out the lower mileage car is the bigger gain (0.0225 G/M vs. 0.015 G/M gain).

Further, the financial gain is much more dramatic when you give up the gas-guzzler as compared to going for super-efficiency. Let’s say that you drive an average of 1,000 miles a month on each car. For this example, we will say gasoline is an average of $3.50 a gallon.

Note that G/M is a handy unit to do this calculation with – the gas guzzler uses 62.5 gallons and the better mileage car uses 40 gallons for a total of 102.5 gallons, which costs $358.75

If we swap the gas guzzler for a medium-efficiency 0.04 G/M car we save $78.75 a month. If we go for the gas-sipping car in place of the middle of the road car, we save only $52.50 a month.

It gets even more dramatic as MPG figures get even higher – you are lead to believe that a 100 MPG car is a far more fuel efficient vehicle than a 50 MPG car, but in truth the difference is slight – in our prior example, only 10 gallons of gas a month, or $35 dollars.

Where this really all comes into play is when you consider the high purchase prices commanded by super-mileage cars vs. medium-mileage ones. Going with the middle of the road model will almost always get you a better payback than paying a premium for a misleading high MPG figure!