Swapping MPH for MPG

Stung by high gas prices, many Americans are trading in their gas guzzlers and finding it's a pretty smart move

Despite the recent relief on oil and gas prices, car buyers today are increasingly looking to trade their vehicles for ones that are more fuel-efficient.

Such an exercise involves a lot of time comparing vehicles online, as well as self-examination to determine what we can do without, what we need to have, and what we can live with.

I just went through this process. The fuel economy I was getting on my 2004 BMW 325 xiT wagon was disappointing. It wasn't bad at all for a V-6 wagon tuned for performance like any good Bimmer. But I experienced distress over filling the tank twice a week, and seeing my fuel-gauge needle drop far faster than I thought it should toward the big "E." The EPA-certified fuel economy was 17 mpg city/26 mpg highway. But driving the car near 80 mph, as it wants to be driven and as my rushed schedule often dictated, made the fuel economy worse than that.

Shift to a Subcompact

My trade: a 2009 Fit (BusinessWeek.com, 8/29/08) subcompact from Honda (HMC). With an automatic transmission, the base model '09 Fit is rated to get 28 mpg in the city and 35 on the highway. The stick-shift versions of the car do slightly worse, as does the Sport version with an automatic transmission, which gets 27 city and 33 highway.

It will cost me new about $7,000 less than the $25,000 my used BMW fetched from a private buyer, and I am getting the navigation system my BMW didn't have. When I drove the car during a press preview, the on-board computer showed I was getting around 38 mpg in mixed city and highway driving, even better than the government rating. The car also has a stiff suspension and a manual transmission, with a nice tight shifter like my BMW. It may not feel as prestigious as my Bimmer, but I already feel smarter, given my anxiety and preference for fuel economy, for having chosen it.

I am not alone in making a choice like this. Dealers report that even pickup owners in Texas have been trading in their haulers for a Ford Focus. Contractors have been buying up used econo-cars like the Focus and Toyota Yaris (BusinessWeek.com, 6/13/06) to ferry workers around from work site to work site, rather than using the big, gas-thirsty trucks. They are making those purchases for the long term, believing that $4 and up is the "new normal" for gas prices after the current downturn has passed.

Saving Money at the Dealer

Often, the trades many people are making not only save money on gas but are also much cheaper than the thirstier alternative. And for people who previously drove Ford Explorers (BusinessWeek.com, 9/1/06), Chevy Tahoes, and Toyota 4Runners loaded with features, automakers are starting to load more comfort and convenience features into the smaller, cheaper cars so better fuel efficiency does not come at too high a comfort cost. The Ford Focus can come with a navigation system, complete with Microsoft's (MSFT) sync system (BusinessWeek.com, 2/21/08) that allows voice-controlled telephoning and MP3 player operation. The '09 Fit also comes with a nav system that was not offered on the previous model.

Worthwhile trades, though, don't always have to be a big vehicle for a small one. Sometimes, it's just a matter of going smaller, or opting for a hybrid alternative, that doesn't require too much sacrifice in utility. In New York, for example, taxi cabs are being converted from Ford Crown Victorias to hybrids like the Ford Escape SUV.

Based on my ability to drive so many new vehicles, and hear from so many readers about what they are looking at and trading for, here is a list of 10 worthwhile trades to consider for better fuel economy.

Before it's here, it's on the Bloomberg Terminal.