Money in gas tank

Car buyers say they’re willing to pay extra for better fuel economy, even if the initial cost exceeds whatever savings they get at the gas pump, a new study suggests. 

The research was conducted by the American Council for an Energy-Efficient Economy (ACEEE) and researchers from Simon Fraser University in British Columbia, and was commissioned by Consumers Union, the advocacy division of Consumer Reports. It showed that respondents valued fuel economy less than safety and reliability but more than acceleration or premium features.

Respondents indicated that they would be willing to pay $10,730 more for a new vehicle to save $1,000 in fuel costs per year—a decision that might not have an immediate payoff at the pump but might help with the vehicle’s long-term value.

According to study co-author Christine Kormos, a postdoctoral fellow at Simon Fraser University, the results demonstrate how car buyers value fuel economy, beyond just saving money.

“It does suggest that there is something else going on there beyond pure economic rationality, that there is some other intangible benefit that consumers perceive to be associated with fuel economy,” she says.

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These results come even as SUV and pickup truck sales continue to be very strong across the country.

“Consumers will say that fuel efficiency is top of mind, but then they still want the SUV,” says Libby Murad-Patel, vice president of marketing and strategic insights for Jumpstart Automotive Media, a company that tracks and reports car buying trends for advertisers and marketers. “I think certainly there’s always a utility factor that’s likely to trump the fuel-efficiency conversation, if you can’t find a vehicle to fit your family size or the needs you have.”

Those who said they plan to buy a large SUV or pickup truck, as opposed to other types of vehicles, said they were willing to pay the most for fuel economy. Kormos said the finding was worthy of further research but suggested that buyers of larger vehicles such as trucks and SUVs care about fuel economy in addition to vehicle size and performance. 

According to Shannon Baker-Branstetter, senior policy counsel for energy and environment at Consumers Union, the study results indicate that consumers are willing to pay extra for efficiency gains among SUVs and trucks. “The marketplace is currently limited by what automakers put out there, and consumers would like more fuel-efficient choices within the vehicle class they’re looking for,” she says.

Baker-Branstetter recommended strong fuel economy standards that force automakers to create more efficient vehicles. “It raises all boats, and it makes all the options get more fuel-efficient, really behind the scenes,” she says.

Automakers say they’re already delivering what consumers want. “The only survey that’s relevant in the real world is the marketplace, and what consumers choose to drive out of showrooms,” says Wade Newton, spokesman for the Alliance of Automobile Manufacturers, an auto industry lobbying group.

For automakers, Newton said that fuel-economy standards represent a balancing act. “We support improving fuel economy, and that’s why mpg has risen in virtually all models in recent years,” he said. “At the same time, we have concerns about future standards becoming more challenging, especially with low gas prices.”

While today’s SUVs are more efficient than their predecessors, study co-author Reuven Sussman of the ACEEE says there’s still room for improvement. “You think about what is actually available to people, and ask, are car manufacturers offering what people really want?” he asks.

Improved fuel efficiency for SUVs may be among the reasons buyers have traded their sedans for SUVs in recent years, Murad-Patel says. “Even those that used to be known as gas guzzlers have really found ways to at least bring their fuel efficiency to an average level,” she says. “I think the manufacturers have been really forced to develop products that are meeting those needs.”

The results come from a survey of 1,883 Americans with a driver’s license who plan to purchase or lease a new or used vehicle within the next 10 years.

The Consumers Union-ACEEE survey also found that the presence of federally mandated fuel-economy labels may have an effect on consumer behavior. For instance, respondents who simply looked at a fuel-economy label were more likely to select more fuel-efficient vehicles and to rank fuel economy as important relative to other attributes.

Respondents under 50 were willing to pay more for fuel economy than those over 50, as were those who were planning to spend $15,000 or more on their next vehicle.