Gas Guzzler Tax

Cars in the US that do not get at least 22.5 miles per gallon have to pay a Gas Guzzler Tax. This tax is the Fed's way of incentivizing the automakers to improve fuel economy. The tax was established in the Energy Tax Act in 1978. It only effects cars. SUVs, pickup trucks and minivans are exempt. You do not have to pay this tax. The automaker (or importer, in the case of foreign vehicles) normally pays the IRS directly. The fuel economy sticker on the window of new vehicles will show the amount of the tax, in case you are interested. The image included with this post demonstrates the Gas Guzzler Tax in the sticker. It is the number located in the lower left.

EPA Fuel Economy Labels

Cars sold in the US are required to display a fuel economy window sticker. This allows consumers to see the estimated mileage per gallon the vehicle gets in both city and highway driving. Consumers can use the information to compare different vehicles. Starting with model year 2008 the format of this information as well as the tests used to derive it have changed. The changes are in response to consumer demand for better information. In particular, the newer tests account for faster driving speeds and greater acceleration. They also take into account usage of the air conditioner and colder outside temperatures.

Looking at the label itself, you can see the two estimates for city and highway driving on the two sides. In the center is the cost of gassing up the vehicle for a year, based on an estimated price of gas and driving distance. Your numbers will be different, especially the cost number. It is hard to get mileage much better or worse than the estimates, but it is easy to drive much more or less than the estimated distance. Also in the middle, below the annual cost of gas estimate, is a bar with a triangle pointing to an overall mileage combining city and highway values. It shows on the left and right ends the range of MPG values for vehicles in the same class, for example SUVs or light trucks. This lets the consumer see how the vehicle stacks up against similar choices.

The choice of vehicle has a big potential to allow you to save on gas. Don't ignore potentially helpful information on the fuel economy labels!