While everyone knows that the "sticker price" on a new car is always greater than the actual price, what happens when the posted fuel economy ratings on new cars are also inflated?

While shopping for a new car last summer, one of the first things I would look for was the posted fuel economy of the vehicle.  While aware of the disclaimers that the numbers are not exact and that fuel economy varies from driver to driver, I’ve always assumed that these numbers are accurate, give or take a few miles per gallon.  Considering the considerable cost of a new car, and the heavy regulation of the automotive industry, one would think that grossly inaccurate fuel economy ratings would give rise to a cause of action under consumer protection laws.  Maybe not.

Enticed by the thought of traveling fifty miles on one gallon of gas, California attorney Heather Peters bought a 2006 Honda Civic Hybrid based on such representations.  According to Peters, however, the car’s fuel economy was only thirty miles per gallon.  Declining to submit to a class action settlement between Honda and other frustrated Civic Hybrid owners, Peters opted instead to fight the automotive giant in small claims court.  Shrewdly, she chose the venue based on a California law prohibiting legal representation of corporations in small claims court.  Instead of battling Honda’s attorneys, Peters’ opponent in small claims court was a Honda engineer.  Her tactics paid off.  In January, Peters obtained a $10,000 judgment against Honda. 

Peters’ victory, however, was short-lived.  Now represented by high-priced counsel, Honda appealed the small claims court’s ruling.  After a three-day trial, Judge Dudley W. Gray, II overturned the judgment against Honda, ruling that the automaker’s fuel economy ratings for the vehicle were obtained using the test method mandated by the EPA, and that the EPA had audited Honda’s numbers and found them to be in compliance.  Judge Gray’s ruling was also based on a finding that many factors affect gas mileage, and that most Civic Hybrids did attain the fuel efficiency advertised by Honda.

Interestingly, one of Honda’s arguments at trial was that federal regulations required advertising of fuel economy numbers that the EPA itself had determined were inflated.  In other words, Honda’s position was, “we don’t dispute that the numbers are inflated, but because we’re required to post them, we can’t be held responsible.”

It seems that one of the purposes of EPA fuel economy regulations is to protect consumers.  In this instance, they had the opposite effect.  According to Judge Gray, they eliminated the consumer protection safeguards normally available to consumers. 

An important lesson to be taken from this case: when shopping for a car, fuel economy research should consist of far more than looking at the sheet on the inside of the car, because if those numbers prove to be false and misleading, your recourse may be quite limited.