Let's start by looking at the parts of the label that have to do with fuel economy. We'll use the label for gasoline vehicles as an example, but most of the information is the same on the labels for other types of vehicles. In a few pages, we'll explain what the differences are.
The label header tells you what type of fuel the vehicle runs on -- in this case, gasoline. This information will mostly be useful to you if you don't know anything about the model you're looking at and there isn't a salesman around to answer questions.
Right below the header comes something far more important -- the fuel economy section of the label, which is the largest section by far of the new EPA label design. The upper left part of this section includes the same information we've been seeing on EPA labels for years -- the city, highway and combined mileage of the vehicle. The biggest change here is that the combined city/highway mileage is now in large print while on older labels it was in such tiny print you practically needed a magnifying glass to read it. The EPA's reasoning is that this figure provides the easiest method of comparing mileage between cars. Drivers who spend most of their time on the highway or in stop-and-go city traffic may disagree, but for most drivers this is probably a good assumption. Because this figure will vary according to driving style and commuter routes, it should be used strictly for comparison purposes between different models of car.
Beneath these figures is what the EPA calls the Fuel Consumption Rate, which they believe offers a much more accurate and easily understandable way to compare fuel efficiency than the MPG figures do. According to the EPA, that's because the relationship between MPG ratings and amount of fuel saved isn't linear, but decreases as the MPGs go up. For instance, as the EPA states on its Web site, the amount of gas saved over a 1,000-mile trip by a car that gets 15 miles per gallon compared to a car that gets 10 miles per gallon -- a 5 mpg difference -- is 33 gallons. But the amount of gas saved over that same trip by a car that gets 35 miles per gallon compared to a car that gets 30 miles per gallon -- also a 5 mpg difference -- is only 5 gallons, a much less significant difference. The EPA calls this the "MPG illusion" and it makes it difficult for a consumer to compare fuel efficiency between two cars merely by noting the difference in MPGs. The new labels avoid the MPG illusion by simply stating the number of gallons that every car will use (on average) over a fixed distance of 100 miles.
In the middle of the label is the EPA's description of the MPG range for the category that the vehicle belongs to (SUV, mid-sized car, etc.), so you can see how the vehicle compares to others in its class. Because not all cars use liquid fuels that can be measured in gallons, some of these figures will be based on the amount of energy that the EPA considers the equivalent of a gallon of gas. These figures are labeled using the term MPGe, which stands for "miles per gallon equivalent."
Probably the most eye-catching piece of information on this part of the label is the fuel-savings figure on the right and it's probably the one that the average prospective car buyer will be most interested in seeing. It gives you an estimate of how much money the car in question will help you save (or overspend) on gas over a five year period as compared with the average new vehicle. Now you might be asking yourself how in the world the EPA can know this. They don't know how many miles per year you drive or what the price of gas is going to be in a few months (or even in a few days) after that label goes on the car. They don't even know what price your local gas station charges per gallon. The answer is that the EPA is just guessing, but at least it's an educated guess, based on a couple of assumptions. The first is that you'll drive about 15,000 miles in a year. This may seem excessive -- some people drive barely a third that many miles in a year -- but the EPA uses this figure consistently for all cars, so this is another one of those numbers that's for comparison purposes only. Similarly, the EPA projects the price of gasoline over the next year based on reasonable assumptions (or maybe they just have a chimpanzee throw a dart at a list of prices?) and they use this figure consistently for all cars to calculate the average gas savings. There's a good chance you won't actually save as much on gas as the sticker says you will, but if you do an unusually large amount of driving and gas prices turn out to be unexpectedly high, you could conceivably save even more. If the projected 5-year cost of fuel for the car is better than average, this estimate will begin with the words "You save $x,xxx in fuel costs." If the cost is worse than average, it will begin with the dreaded phrase "You spend $x,xxx more in fuel costs." But what the heck -- it's your money.
The EPA label contains one more small section relating to fuel economy: annual fuel cost. This is the amount that you'll spend on gas in one year to keep the car running. It's based on the same assumptions as the fuel savings estimate -- that you'll be driving 15,000 miles annually and that the EPA has correctly calculated what the average price of gas is going to be over the next year. So, as you've probably guessed, this figure bears only a slight resemblance to reality and should be used for comparison purposes only.
And that's it for fuel economy. But the next part of the label contains information that many drivers will consider even more important, about the impact the car is likely to have on the environment.