Consumers who buy the fuel-efficient new cars that will roll out to meet tough new fuel economy standards will save thousands of dollars over the life of the vehicles, according to a new report released today by Consumer Reports. Fuel savings will more than offset any additional price increase for the new technology required to meet the more stringent standards. Safety and fuel economy have improved simultaneously, and the new standards will not impact safety.
The study shows that the technology needed to meet the 2025 requirements is estimated to increase the cost of a new vehicle by about $1,800. But the upfront cost is a good investment: consumers will earn about $7,300 in fuel savings over the 15-year average lifespan of the new vehicle. Consumers who pay cash for new cars engineered to meet the new mpg targets will break even in just over three years of ownership. (Download the full fuel economy study.)
Consumers who finance their new-car purchase start saving right away, because the immediate gas savings more than offsets any additional monthly payment attributable to new fuel-economy technology.
Find out how to save money at the pump now in your current car. See our fuel economy guide.
The Obama administration passed the new Corporate Average Fuel Economy (CAFE) rule in 2008 that will bring the average fuel economy figures shown on new-car window stickers up to about 40 mpg by 2025 (The standards have been referred to as targeting "54.5 mpg", but that's a regulatory target that includes credits and other incentives.)
The new standards are expected to save about 30 billion gallons of gasoline a year by 2025 with an estimated net benefit to consumers between $326 billion and $451 billion over the lifetime of the new vehicles. An added benefit is that they are also expected to cut 2 billion metric tons of greenhouse gas emissions over the life of the vehicles and to improve air quality.
"Decreasing oil consumption also creates jobs and helps insulate our economy against global oil price spikes," reads the report presented to media and industry at an event today a Consumer Reports headquarters in Yonkers, New York. "In place of spending money on gasoline, consumers will have more money to spend on cars and other goods and services. Reducing oil consumption brings economic security benefits as well, reducing our consumption of a product subject to large price fluctuations and a long-term trajectory of increasing prices."
CR's own surveys have shown that fuel economy is one of the most important factors people want in a new car. Both the fuel economy of new cars and new car sales have risen for each of the past four years, while prices have remained relatively stable.
We support the new standard and believe it will be a helpful and cost-effective way to reduce America's oil dependence, cut greenhouse gas emissions, and put more money in consumers' pockets.