Friday, February 3, 2012

Honda Civic Hybrid--Suing over MPG in Small Claims Court

Heather Peters sued Honda in small claims court because her Honda Civic Hybrid did not deliver the 50 MPG promised on the window sticker.

The court awarded her $9,867 for "extra money spent on fuel, both in the past and future, the cost of the car battery, and the decrease in the car's value because of its problems."  (The court could award an amount no greater than $10,000.)

Peters reported that "'the car never got more than 41 or 42 even on its very best day.'  She said the fuel economy dropped below 30 mpg after a software update intended to prolong the life of the car's battery and improve performance."

This case reveals one of the problems caused by MPG.  EPA ratings have historically overstated actual MPG (i.e., in "real" driving conditions).  This problem was addressed in a 2008 reform.  Nevertheless, it persists.

When drivers expect 50 MPG and get only 40 MPG, the difference feels very large and disappointing.  But the difference in gas consumption is not nearly as consequential.  That different between 40 and 50 MPG is 5 gallons  of gas every 1,000 miles.  Assuming a car has a life of 150,000 miles of driving, that's 750 gallons of gas, which adds a little over $2,500 in costs at $3.50 a gallon.  The difference between 33 and 50 MPG is 10 gallons of gas every 1,000 miles, which adds a cost of $5,000 over a 150,000 miles of driving.

The lost gas savings appear to be between $2,500 and $5,000.  It is hard to see how Peters' experience justifies a $10,000 award.

The use of MPG makes shortcomings in a car's actual fuel efficiency seem large where they matter least--on cars that are very efficient.  You see many car forums where hybrid drivers are frustrated that they're getting "only" 42 MPG instead of the promised 50.  The effect on gas consumption, however, is negligible.  I'm not defending inaccurate MPG reporting by car companies.  I am saying that the practical difference between 42 MPG and 50 MPG is small.

In contrast, consider a minivan driver who expects 19 MPG but gets 17 MPG in reality.  How frustrated is the driver?  It seems like a small difference, either in absolute terms (2 miles) or percentage terms (a 10% deficiency).  That difference in MPG is more consequential than the difference between 40 and 50 MPG.  It translates to roughly 7 gallons every 1,000 miles, or an additional cost of $3,675 over 150,000 miles of driving.

MPG makes shortcomings in a car's actual fuel efficiency seem small where they matter most--on cars that are inefficient.