What you are about to read may change your perception of fuel economy. And if you take the time to wrap your mind around it, you will see a much clearer picture of fuel consumption and gas costs. This means the next time you're in the market for a new car, you'll better understand how to choose one that suits your needs.

We're about to introduce you to a new system of measuring fuel economy, one our European brethren have used for years to help them keep a clearer picture of fuel costs.

But first, here's why you need to know this.

**The Problem**

The current system of measuring a vehicle's efficiency by mpg creates an inaccurate perception about fuel consumption. Because as the mpg rating of a vehicle rises, it appears that it does so proportionately. What this means is if you were to trade in a car getting 12.5 mpg for one getting 25 mpg, it would obviously deliver fuel economy that was twice as good. But if you later traded that car getting 25 mpg for one getting 50 mpg, that exchange would *not* save you twice as much.

Here's why: Imagine three cars lined up side by side. They all drive 100 miles. Since each car has a different fuel economy rating, they each burn different amounts of gas to travel that same distance.

12.5 mpg = 8 gallons per 100 miles 25 mpg = 4 gallons per 100 miles50 mpg = 2 gallons per 100 miles

Now look at how much gas is *saved* in each case. Over a 100-mile drive, the 25-mpg car saves 4 gallons over the 12.5-mpg car. But over the same distance, the 50-mpg car *saves* only 2 gallons over the 25-mpg car. Taken to the extreme, if there was such a thing as a commercially available 100-mpg car, it would only save *1 gallon of gas* over the 50-mpg car.

**What Does This Mean to You?**

Once you understand the concept, it reveals two key points:

- Trading in a gas guzzler for a midsize sedan provides substantial savings.
- Trading in a midsize sedan for a high-mileage hybrid would hardly be worth the expense in fuel (especially when the taxes and related fees are considered).

The new system also reveals three related concepts that are largely unrecognized:

- Fuel-economy improvements from 12-20 mpg are significant.
- Once vehicles get over 25 mpg, the gains are much less dramatic.
- While extremely high-mileage hybrids provide eco bragging rights, they don't
*save*much more gas than midsize sedans.

While it continues to be important to note the mpg rating of a vehicle, it's also worth considering a car's gpm rating. Most vehicles will rate somewhere between 10 and 2 gpm. A gas guzzler netting only 10 mpg would consume 10 gallons per 100 miles, while a far thriftier 50-mpg vehicle would consume only 2 gallons. Clearly, the smaller the gpm rating of the vehicle, the better its fuel-efficiency.

**Calculating Fuel Costs**

Once you get the hang of it, you can estimate fuel costs in your head. Here's how.

Adding a zero to a vehicle's gpm rating would show the estimated amount of fuel consumed in a month. So if an SUV consumes 8 gpm (8 gallons to drive 100 miles) it will require 80 gallons to drive 1,000 miles — what many people drive in a month. Then it's easy to see that driving 10,000 miles (nearly a year of driving) would require 800 gallons.

Estimating fuel costs would then be a matter of multiplying this number by the price of gas. At $3 a gallon, the yearly expense of driving this 8-gpm SUV would be about $2,400. Comparing a very fuel-efficient car rated at 3 gpm, you can see it would consume only 300 gallons a year and the annual bill would be about $900.

**Bang for Your Buck**

When asked which provides a greater savings, most people look at the biggest difference in the mpg ratings between two cars and figure it delivers the largest payback. It would be easy to assume that an improvement from 34 to 50 mpg would save a lot more gas than an improvement from 18 to 28 mpg. But the clear winner here is going from 18 to 28 mpg since — surprisingly — it saves *twice* as much gas. Over the course of 10,000 miles, going from 34 to 50 mpg saves 94 gallons, but jumping from 18 to 28 mpg saves 198 gallons.

When fuel economy is viewed from the perspective of gpm, these mistaken impressions are eliminated. So when 18 mpg becomes 5.5 gpm, and 28 mpg is 3.6 gpm, a more accurate fuel savings picture is revealed.

**A Paradigm Shift**

Thinking of fuel economy in terms of gpm can help car shoppers make more economically sound decisions. For example, if deciding between an SUV that gets 15 mpg and one that gets 18 mpg, it'd be tempting to think, "There's almost no difference," and opt for the lower mileage choice. But in terms of TFC, the 15-mpg SUV uses 6.6 gallons to go 100 miles while the 18-mpg SUV uses only 5.5 gallons. That 1.1-gallon difference adds up. In just a month of driving (1,000 miles), the 18-mpg car would use 11 gallons less (saving $33) and burn 120 fewer gallons (saving $360) over the course of a year.

Shoppers will start seeing more GPM figures in the future. The new Environmental Protection Agency fuel economy labels set to debut on 2013 model year vehicles will display the "gallons per 100 miles" figure under the combined mpg number. This will make it easier to compare GPM when you are on a dealer lot.

Americans have been trained to think in terms of mpg for so long that it may take some time for gpm to sink in. But take a little time to understand this new way of calculating fuel consumption, and you might make better vehicle choices for your lifestyle and budget.

To find a dealership that knows how to treat shoppers right, please visit Edmunds.com's Dealer Ratings and Reviews.