Hon David Parker
Minister of Energy
Jeanette Fitzsimons
Government Spokesperson on Energy Efficiency

26 March 2008 Media Statement
EMBARGOED TO 11.30AM 26 MARCH

Helping hand for car buyers looking for savings

Car buyers wanting to save money on their fuel bills will find it easier to choose a vehicle that goes further on a full tank, as a result of new fuel efficiency labels.

David Parker, Minister for Energy and Climate Change Issues, and Jeanette Fitzsimons, Government Spokesperson on Energy Efficiency and Conservation, today officially unveiled the fuel economy label that will be displayed on cars for sale in car yards or via the Internet from 7 April.

The label shows a star rating – similar to that seen on fridges and other appliances – and also estimates the fuel cost per year, based on an average fuel price and distance.

“We’re introducing fuel economy ratings to give New Zealand car buyers the power to make smarter choices, by helping them identify suitable vehicles that will go the distance using less fuel.

“At the same time as saving individual car owners money, moving to cars that use less fuel will also reduce fuel consumption and greenhouse gas emissions nationally.”

David Parker says the New Zealand labelling programme is world-leading, as similar labels overseas only apply to new vehicles. “Most people can save themselves many hundreds or thousands of dollars each year by choosing a more fuel efficient car when they next buy one. We’re helping them do this by providing easily understood and reliable fuel efficiency information to car buyers. With petrol prices on the rise, this is all the more important.”

The labels will be required for cars where fuel economy information is available; all new cars and late model used cars. The fuel economy rating will also be shown on website listings, with major sites such as TradeMe already set up to provide the information as part of the listing.

Jeanette Fitzsimons says research shows that fuel economy is one of the top three criteria New Zealanders look at when considering buying a car.

“We found that people didn’t know that there can be big differences in fuel consumption, even between cars of the same or similar size. For example, across “medium” cars (engine size 1.4 – 2.2 litres) there’s a range from five and a half stars to three and a half stars. Over a year, the three and a half star car will cost you twice as much in fuel as the best-rated car.”

Mr Parker and Ms Fitzsimons thanked those in the motor industry and the major website owners for their cooperation in developing and delivering the ratings.

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Background information

What information will be on the fuel economy label?

The label will show:

- Fuel economy stars – rated out of 6, this indicates how fuel efficient the vehicle is.

- Litres per 100km –fuel consumption figure expressed in litres per 100km for new vehicles only based on independent testing of the vehicle.

- Cost per year – estimated annual fuel economy cost based on the average fuel price and an annual distance of 14,000km. This is calculated to help you compare one vehicle with another; it does not tell you what you will actually pay because it’s based on averages, not your actual vehicle use.

- Vehicle Make and Model

Which cars will have labels?
Fuel economy information has been collected and is available for vehicles imported since 2005 and manufactured since 2000. This means new and late model used cars will generally have labels, although some cars that were New Zealand-new between 2000 and 2004 may not have labels, as they were imported before 2005 when the collection of information began. Each year, the proportion of cars that we have information on will increase, so that within a few years the vast majority of cars will be covered.

Where does the fuel economy information come from?
Importers and manufacturers are required to supply fuel consumption information to Land Transport New Zealand, based on independent testing. This information is held in the database that sits behind www.fuelsaver.govt.nz, www.rightcar.govt.nz and the fuel economy labels.

How do motor vehicle traders get labels?
Labels can be generated via the fuelsaver website or may be provided with the car by the importer or manufacturer.

Do private sellers have to do anything?
Private individuals selling cars do not have to display a fuel economy label on the car, but they do have to ensure the information is included in a website listing, where it is available. The major trading websites, such as TradeMe and AutoTrader, have set up systems to include the information in listings.

Where can I find fuel economy information about my car?

www.fuelsaver.govt.nz

What happens if the information’s not available?
Fuel economy information may not be available for a number of reasons including the age of the vehicle or where it’s imported from. If the information is not available, the seller is not obliged to display it. Buyers may still be able to find information about cars of the same or a similar make and model on www.fuelsaver.govt.nz, even if the exact car they’re looking at is not in the database.

What’s a “good” fuel economy rating?
It depends on what size car the buyer needs; smaller cars generally use less fuel but may not always meet the buyer’s requirements. Within each vehicle size there is a wide range of fuel use.

The best rating cars currently on the market are hybrid cars and small new diesel cars, which rate at five and a half stars. The best large cars rate four and a half stars.

How is the cost per year worked out?
The cost per year is calculated using the average fuel price stated on the label and an average distance of 14,000 km, and the litres per 100 kilometres for the car, based on testing when the car was new.

Because it uses average figures, it will not tell you exactly what the car will cost you to run. It’s a guide, not a guarantee. It is a useful tool for comparing cars, because the same averages are used for each car.

It is not practical to change the information on the label every time the fuel price goes up or down. So an annual average has been used as a basis for comparison.

The distance people travel also varies considerably, so an average of 14,000km (used by the AA and Department of Inland Revenue), has been used in the calculation as a reasonable basis for comparison.

How much can people save?
Thousands of dollars will be saved by many people. A fuel efficient car can cut your petrol or diesel bill dramatically. Lots of people will save $40 per week – that totals $2000 per year and makes a real difference to the cost of living.

ENDS

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