New cars can save you hundreds a year in gas

If you've been on the fence about whether to trade up to a new car, here's a little fuel for the fire: Replacing your 10-year-old car with a new version of the same model could save you more than $600 annually in fuel costs.

While that may not amount to much more than one payment for many moderately priced models, $600 isn't exactly pocket change, either. And combined with the added safety features, improved crash protection, up-to-date electronic connectivity, and the security of a new car warranty, the savings may be enough to help you tip the scales toward buying a new car.

It's no secret that the overall mpg of virtually all new vehicles has been inching up over the years, thanks to more advanced engines and transmissions, low-rolling resistance tires, overall weight savings, and other factors. Likewise, horsepower and physical dimensions have grown over time.

To see how far things have come, we went looked at several  models tested about 10 to 12 years ago and compared their overall fuel economy to current versions of the same vehicles. While we saw increases in almost every case, some of the biggest boosts were in midsized family sedans. And of those, the four-cylinder Mazda6 was the champ, going from an average mpg of 23 overall back in 2004 to a class-leading 32 overall with the 2014 model. Based on a gas price of $4.00 per gallon for regular and 12,000 miles driven per year, that works out to an annual savings of $587 for the new Mazda.

We also saw a big boost in four-cylinder versions of the Honda Accord and Nissan Altima. Those increased by six and nine mpg overall, respectively, to 30 and 31 mpg. That adds up to a $633 savings for the new Altima every year and $400 for the Accord.

Obviously, if you drive less, the savings won't be as great. But if you tend to rack up more miles every year, there's even more reason to make a trade. And, for the record, all the vehicles in our examples were equipped with automatic transmissions.

For most larger sedans and SUVs, the savings weren't as great. Still, trading in that old Chrysler 300 V6 for a new one could save $345 per year and moving up from a 10-year old Ford Escape to a new, more powerful model could save a substantial $642 annually.

That alone may not be reason enough to escape from your old Escape. But the $3,210 you'd save over five years could really add up, and it could be put toward yet another escape—like a trip to Hawaii.

—Jim Travers

Visit our guide to fuel economy to discover the most fuel-efficient cars and learn how to save gasoline with your current car.