What Is Fuel Economy? How to Reduce Costs

A gas pump with money coming out of it.

As a business owner, you know that fuel costs can significantly impact your bottom line, especially if you have a large fleet. Constantly fluctuating fuel prices and the ever-increasing cost of gas and diesel can squeeze profit margins and make paying refueling costs a headache.

In this article, we explore what fuel economy is and provide you with 12 actionable steps to take. We also discuss how fuel cards can help small businesses like yours improve fuel efficiency, reduce fuel costs and ultimately save money.

Short on Time? Here Are the Key Takeaways

  • Fuel economy refers to the distance a vehicle can travel on a single unit of fuel, or how much fuel a vehicle uses over a certain distance, like miles per gallon.
  • Simple adjustments to driving habits, as well as routine maintenance, can improve fuel economy.
  • Fleet fuel cards can lower the cost per gallon of fuel, saving you money at the pump, but won’t necessarily positively impact your fuel efficiency.

What Is Fuel Economy?

Fuel economy, measured in miles per gallon (MPG) in the US, represents the amount of fuel a vehicle uses to travel a specific distance. The lower the amount of fuel required to travel that distance, the better the vehicle’s fuel economy is. For businesses with gas or diesel-powered fleets, optimizing fleet average fuel economy translates directly to reducing costs.

Improving fuel economy is important not only because it can significantly reduce the cost of running your fleet, but improved fuel economy also helps maintain cleaner air in high-traffic areas. Similarly, improving fuel economy can help protect the environment, preserving the health of plants, wildlife, and humans.

For electric vehicles (EVs), even though they are not powered by gas or diesel, they do have an efficiency rating, which is measured in kilowatt-hours per mile (kWh/mile). Similarly to fuel-powered vehicles, kWh/mile can be improved by adjusting driving habits, improving aerodynamic efficiency, and utilizing EV fuel cards to decrease costs at the plug.

12 Steps To Improving Your Fuel Economy

Now that we understand what fuel economy is and why improving it is important for lowering costs and protecting people and the environment, let’s discuss how to improve fuel economy and explore 12 strategies you can implement to starting today.

1. Maintain optimal tire pressures

Improving fuel economy is a game of reducing friction and improving efficiency. Under-inflated tires increase rolling resistance, which increases friction and forces the engine to work harder and burn more fuel in order to move the vehicle.

Check and adjust tire pressures regularly, and do your best to keep tire pressures within the manufacturer’s recommendations (including the spare tire). Communicate this to your drivers as well, so they can keep an eye on tire pressures while on their routes.

Newer vehicles may tell you your tire pressure automatically without you having to check manually, and they may even send this information to an app or website for easy access. Third-party devices that attach to tires can also provide you with this information. That way, you can always keep an eye on tire pressures.

2. Implement a regular maintenance schedule for your vehicles

Vehicles wear down over time, and vehicle wear reduces engine, transmission, and drivetrain efficiency, which all contribute to lowering fuel efficiency and increasing costs. Enforcing a regular fleet maintenance schedule will help vehicles operate more efficiently and keep them driving for longer.

At a minimum, stick to the manufacturer’s recommended service intervals to ensure optimal engine performance, air filter cleanliness, proper fluid levels, and well-oiled drivetrain performance. Worn spark plugs, dirty air filters, and low engine oil can all contribute to decreased fuel economy.

3. Encourage smooth and efficient driving habits

Inefficient driving habits like aggressive acceleration, harsh braking, and rapid lane changing can all hurt fuel economy.

A vehicle’s fuel consumption is the highest at low speeds because the vehicle has little to no momentum, and therefore requires more fuel to overcome inertia and increase speed. Once the vehicle has gained momentum, fuel efficiency begins to improve. As a result, accelerating gradually at low speeds will improve fuel economy when compared to accelerating quickly.

While braking doesn’t directly hurt fuel economy, each time you break, you’ll need to use fuel to speed back up and gain momentum again. Avoiding unnecessary braking can help minimize the need for low-speed acceleration. Similarly, rapid lane changing only lowers fuel efficiency slightly, but the ripple effect on other vehicles can result in traffic jams and unnecessary braking and acceleration.

Work on promoting a culture of smooth, efficient driving within your fleet. This can include encouraging drivers to maintain consistent speeds whenever possible, avoid unnecessary braking and acceleration, and minimize idling time. All of these practices can improve fuel economy and reduce costs for your business.

4. Reduce weight and unnecessary drag

Extra weight in your vehicles will reduce fuel efficiency, and the increased drag will result in higher fuel consumption. Encourage drivers to remove unnecessary items from their vehicles and only carry the equipment that is necessary for the job. Additionally, consider removing roof racks and other bulky exterior accessories that increase wind resistance when not in use.

Pro Tip: you can also utilize products like EcoFins, which adhere to the outside of your vehicle and alter the flow of air to help reduce drag and improve fuel economy.

5. Plan routes and utilize efficient navigation

Thoughtful route planning can help reduce fuel consumption significantly. Implement navigation systems that automatically suggest the most fuel-efficient routes, considering factors like road conditions, fuel station locations, topographical factors (frequent hills reduce fuel efficiency), crosswinds, and traffic conditions.

Avoiding stop-and-go traffic whenever possible can significantly improve fuel economy. This could mean navigating around congested cities and towns when possible instead of traveling through these locations, or planning trips for days and times with less congestion, like on weekends, midday, or outside heavy traffic windows.

6. Turn off air conditioning and electronics whenever possible

This might sound like an unusual way to improve fuel economy, but every part of a vehicle uses energy to operate, from the air conditioning to the speakers, to the navigation and more. This energy comes from the battery, which is kept charged by the engine, which can reduce fuel efficiency.

Utilizing these luxuries increases comfort, but it also increases engine load and fuel consumption. Encouraging drivers to use air conditioning and other electrical processes efficiently, turning them off when not necessary, can help improve fuel economy and save money.

7. Minimize idling time

One simple answer to the question of how to get better gas mileage is to ask your drivers to minimize idling. Excessive idling wastes fuel, so drivers should minimize idling for extended periods, like while they’re at a fuel station, a rest stop, or taking a break.

Encourage drivers to turn off the engine when sitting in extended traffic jams or during short breaks. Some modern vehicles also offer automatic engine stop-start systems that can further reduce idling fuel waste.

8. Prioritize fuel efficiency when upgrading vehicles

As vehicles in your fleet begin to show their age and eventually need to be replaced, consider opting for models known for their fuel efficiency, reliability, and fuel-saving technology. Hybrid vehicles, vehicles with automatic stop-start functions, and vehicles designed to maximize aerodynamic efficiency and reduce drag are all great options to consider when upgrading.

Technological advancements have led to significant improvements in engine performance, durability, and fuel economy in recent years. Newer vehicles may offer significant cost savings over time.

9. Monitor and analyze fuel consumption data

There’s an adage that you can’t improve what you don’t understand, and fuel economy is no different. To help with this, most modern vehicles provide onboard trip computers that display basic fuel consumption data. Encourage drivers to monitor their fuel efficiency, identify areas for improvement, and reduce fuel consumption as much as possible.

Additionally, consider using fleet management software and a fleet fuel card, which allow you to track fuel consumption across your entire fleet. These tools can also allow you to analyze refueling frequency, fueling locations, and fill-up costs, so you can know exactly how much you’re spending on fuel and where at any given time.

Reviewing this data can help identify specific vehicles that may require maintenance or improvements. The data can also help pinpoint specific drivers who might need additional education or intervention to improve their fuel economy.

10. Incentivize fuel-efficient driving

Consider implementing incentive programs designed to reward drivers who demonstrate fuel-efficient driving habits. Incentives could include public recognition, bonuses, gifts, extra time off, a credit system, or other perks. Building incentive structures around fuel economy will encourage everyone—not just efficient drivers—to drive more thoughtfully and reduce costs for your business.

11. Use a fuel card, Fleet fuel card, or EV fuel card

If you’re wondering how to reduce fleet fuel costs, then an EV card could be your answer. These credit cards can help lower costs at the pump through discounts, reward points, rebates, or other benefits. Fuel cards can save you anywhere from a few cents to a few percentage points on fuel. Some fuel card providers also offer expense tracking, fleet insights, controls over spending, approvals, access, and fleet management functions.

On top of offering rewards for gas and diesel purchases, some fuel card providers also support electric charging for EV fleets. These cards offer discounts on both gas and EV charging, while others are fully dedicated to providing discounts and rewards at EV charging stations.

Several financial companies offer different types of fleet fuel cards for businesses. Take a look at our list of the best fuel cards in 2024 to find the best option for your business.

12. Consider adding EVs to your fleet

When the time comes to replace vehicles in your current fleet, consider purchasing EVs to supplement your gas and diesel vehicles. EVs can be charged at regular or fast-charging stations both throughout the US and around the world, offering you many options depending on your routes. You may also be able to charge them at your headquarters.

EVs aren’t free to operate, nor is the electricity they use to run, so it’s best to analyze the costs of utilizing EVs in your fleet before making any big purchases. However, EVs can offer an alternative to gas and diesel vehicles that you might find advantageous. Several financial institutions offer electric vehicle fuel cards, which can help lower your cost at the plug.


Fuel costs are a significant operational expense for businesses with fleets of vehicles, and managing fuel costs can be challenging. Encouraging fuel-efficient driving habits, performing regular maintenance, planning efficient routes, and utilizing technology to manage fuel consumption, and using a fleet fuel card are all effective strategies to maximize fuel efficiency and lower costs.

By implementing the steps described in this article, you’ll be empowered to improve your fleet’s fuel efficiency, make your drivers more conscious and thoughtful of fuel usage, save money, and help protect our planet.


What is the best speed to drive for optimal fuel economy?
The best speed to optimize fuel economy depends on several factors, including traffic, road conditions, elevation changes, tire pressure, and more. In general, the best gas mileage speed for highway driving is around 60mph, as this speed maintains momentum with relatively low air resistance. The best speed for city driving depends on many factors, but a consistent speed that minimizes unnecessary braking and accelerating is optimal for fuel efficiency.
Do biofuels improve fuel economy?
Biofuels can be a more sustainable and efficient alternative to traditional gas and diesel, but the impact on fuel economy can vary. Some biofuels have slightly lower energy density, potentially reducing gas mileage. In general, biofuels are best used as part of a comprehensive strategy to reduce environmental impact and improve fuel economy.
How can I choose fuel-efficient vehicles for my fleet?
Understanding when to retire and replace vehicles can be confusing, but several resources can help you choose fuel-efficient replacements. Government websites often publish fuel economy ratings for different vehicle models, and manufacturers typically highlight the fuel efficiency of their vehicles in marketing materials and vehicle specifications.

Consider the type of vehicle your business needs and prioritize vehicles known for their reliability, durability, and fuel economy within that category of vehicle.

Written by:
David is a Certified Public Accountant and prolific finance writer, specialising in taxes, business accounting, and corporate finance. He holds a BSc in Accounting and has worked as a CPA, tax accountant, and senior financial accountant for several years. David has written and edited thousands of articles for millions of monthly readers, and has contributed to the likes of Investopedia, The Balance, OnPay, and now Expert Market.