Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Feb 3, 2012

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While it may not seem like it, automakers have made huge leaps in fuel efficiency technology within the last few decades. We’re not just taking about the electric vehicle platform either, as we’ve also seen technological improvements in good old-fashioned V-cylinder blocks. But with that being said, when one seeks car financing and begins their vehicle research, the miles per gallon (MPG) statistics are simply not that impressive.


And it’s true—our actual MPG’s have seen very little improvement over the years. When in a mere six decades time the human race created an atomic bomb, landed men on the moon, created the internet, equipped the larger half of the planet with cellular phones, and now markets tablets that are controlled by touch screen, how are our vehicles still only getting a prehistoric 20 to 30 miles to the gallon? Sherlock Holmes, where are you when we need you most?


Technology Is Just Trying to Keep Up


Car loan holders may not have a fictional detective on the case, but they do have the next best thing: an MIT economist named Christopher Knittel. According to Knittel the reason why car loan borrowers are seeing such stagnation in miles-per-gallon (MPG), even in light of all the technological fuel efficiency advancements, is because our automobiles are continuously growing bigger and more powerful, reported an MIT News article.


In fact, according to the MIT economist, in the last 30 years MPG has increased just slightly more than 15 percent—a very small, if not embarrassing, improvement. But when compared to the increase seen in weight and horsepower—which rose 26 and 107 percent respectively—during that same time period, it’s easy to see where the increases in fuel economy technology are being eaten up at.


 “Most of that technological progress has gone into [compensating for] weight and horsepower,” explained Knittel.


Indeed if auto loan borrowers were purchasing vehicles with this new MPG technology, but with the same weight and horsepower as those vehicles found in the 1980’s, they would actually be noticing a 60 percent increase in fuel efficiency. To put that percentage to numbers, the average 23 MPG that today’s automobiles boast would actually be closer to 37 MPG if we stripped them of their added weight and horsepower.


‘Give Customers What They Want’


But the auto industry isn’t producing heavy vehicles to spite car loan borrowers. Rather they’re simply meeting demand. This de minimis forward movement in the average MPG that vehicles boast is nothing more than a product of what we—society—values as important.


“I find little fault with the auto manufacturers, because there has been no incentive to put technologies into overall fuel economy,” said Knittel. “Firms are going to give customers what they want, and if gas prices are low, consumers are going to want big, fast cars.”


He does have a point. But don’t take his word for it, turn to the empirical method and try this next time you see a Lamborghini or Ferrari driving down the road: don’t stare it—instead look to those in the cars next to you. Most will be staring open mouthed, their necks twisted around like the MacNeil’s daughter in The Exorcist, or fumbling with their phones, trying to get their camera function to activate at a time when it never seems to want to cooperate.


But when these monsters can light the road up from zero to 60 miles per hour in less than 3 seconds, it should come as little surprise that we begin to pull a Pavlov’s dog and salivate at the mere sound of these awesome creations. And for many—even when they don’t have top-notch Italian-made vehicles—if that means sacrificing a few extra bucks at the gas pump, then so be it.


But for others of us, we could care less.


While the voices of the gas-conservatives’ aren’t nearly as well received as those who love the heavy, all metal, muscle cars, there are some new technologic tools we can all use to help us better manage our fuel efficiency.


For smart phone users, check out some of these free applications, as recommended by MSN Autos, that are designed to help auto loan borrowers looking to save on money spent at the pump.

  • Gas Price Predictor: this iPhone application attempts to tell users when the best time to refill is by using web-based data to predict tomorrow’s gas prices.
  • Gas Cubby MPG Car Maintenance: iPhone users can track their gas mileage and vehicle maintenance with this app. No longer will car loan warranties expire due to forgotten maintenance dates.
  • Cheap Gas: Android phone owners can find the cheapest gas stations in their area using this GPS tracking application.
  • Gas Mileage Calculator: tracks an Android user’s gas mileage and cost per mile.


However, until the nation as a whole collectively makes a push for more fuel efficient cars, MPG-worried auto loan financers will need to settle for what’s available. Or they can turn to some of the more expensive electric vehicles that suit their needs. Before trying to qualify for a $40,000 car loan to finance a cutting-edge electric vehicle though, it would be wise to do a cost-benefit analysis to determine where the break even point is when comparing an expensive auto loan to the money saved on gas.