When people talk about fuel efficiency the number most often used is mpg (miles per gallon). Though this is a good number to use it can be confusing when trying to compare two different cars . Why do I think it’s confusing you say? You’d think that if I say “this car gets 5 miles more per gallon than that car” it means that it will save you a certain number of gallons over a year. It doesn’t. Going from 15 mpg to 20 mpg is completely different than going from 25 mpg to 30 mpg. I think a far better number to look at is Gallons per year and here’s why.
Photo source: taylor.a 
Miles per Gallon
Assume you drive 15,000 miles a year and that gas is $4 a gallon (numbers are selected only for roundness – feel free to use your own). Here is what gas gallons and miles look like at various mpg.
For a 15 mpg car you would use 1,000 gallons over a year (15,000 miles / 15mpg) and spend $4,000 (1,000 gallons * $4/gal). Let’s compare this in 5 mpg increments:
|MPG||Gallons Per Year||Dollars Per Year|
While the mpg is going up the same amount on each line the gallons and dollars are not.
So if you drive 15k miles a year:
- Moving from a 15 mpg car to a 20 mpg car will save you 250 gallons and $1,000.
- Moving from a 25 mpg car to a 30 mpg car will save you 100 gallons and $400.
In both cases you increase the fuel efficiency by 5 mpg but the results in gallons and dollars is completely different.
Gallons per Year
When thinking about fuel efficiency I think it helps to think in terms of Gallons per Year. Saving 100 gallons per year is the same no matter where you start in terms of both gallons and dollars.
Let’s look at the same example above.
- Moving from 1,000 gallons per year (15mpg) to 750 gallons per year (20mpg) saves you 250 gallons and $1,000.
- Moving from 750 gallons to 500 gallons is exactly the same savings.
So how can you utilize this information in your real life? When shopping for cars  always calculate the savings of a more a fuel efficient vehicle. “This car gets 5mpg better gas mileage” isn’t as helpful as “I’ll save a $1,000 each year from using less gas”. It also is helpful when thinking if it is worth the trade off to pay more for better efficiency. “This car costs $5,000 more but since it will only save me $400 a year in gas maybe it’s not worth it.” (note – it may still be worth it to you in terms of being better for the environment. That’s a fine reason to do it if you know that’s what you’re doing and you aren’t planning on a big savings that may not be there.)
In short remember to look at gallons per year. I think the number is a lot more helpful.