Why people don’t buy the fuel-efficient cars.

Gas in my area is around $3.50 per gallon.  Given that it was $2.00 per gallon a few years ago, why don’t more people buy the super efficient cars?  Let’s think about a few things.  First of all, it’s important to understand what fuel efficiency saves you.  Assume you drive the 12,000 per year that most warranties reflect.  Let’s look at the annual fuel costs for various mileages.

20mpg: 12,000 miles per year / 20mpg = 600 gallons per year.  At $3.50, that’s $2100 per year.

25pmg: 12,000 miles per year / 25 mpg = 480 gallons per year.  At $3.50, that’s $1680 per year.

30mpg: 12,000 miles per year / 30mpg = 400 gallons per year.  At $3.50, that’s $1400 per year.

35mpg: 12,000 miles per year / 35 mpg = 343 gallons per year.  At $3.50, that’s $1200 per year.

40mpg: 12,000 miles per year / 40mpg = 300 gallons per year.  At $3.50, that’s $1050 per year.

Notice something important: for every gain of 5mpg, you have a diminishing return in gas savings.  Going from 20 to 25 mpg saves you $420.  Going from 35 to 40 mpg saves you $150.  If you extend that over the course of five years, that’s a decrease in savings from $2100 down to $750.

Now, the actual mileage you’ll get also depends on where you drive.  I drive mainly on the highway.  As a result, I get the higher end of my car’s potential mileage.  If you drive on the city streets, you can lose over 10 mpg in mileage.  You can’t just shop based on the “ideal” condition.  Speaking of “ideal”, don’t forget the electricity for a Chevy Volt costs money, too.

So, what are the trade-offs to get a more fuel-efficient car?  You can pay for a more expensive power-train; you can get a smaller, lighter, and probably less safe car; or you can accept a combination of the two.  More expensive can blow somebody’s budget, making the more fuel-efficient car unobtainable.  By the same token, nobody can build a car with a cardboard body and get it approved, even though you could get 60 mpg out of it.

So the result is this: you deal with perceived safety and up-front price against diminishing long-term savings.  In addition, if you need storage for a work vehicle or large family, that will force your vehicle to be larger and, as a result, less fuel-efficient.  In the end, we are approaching the limits of the process of converting potential energy to kinetic energy.  Gas simply has a limited amount of energy in it, and it is not possible to convert 100% of that to motion.  Electricity is still potential energy, and don’t make the mistake of thinking it’s free.

We are at the point of diminishing returns, and everyone knows it.

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