Gas station price sign representing the assumptions behind estimated annual fuel cost on the EPA label

Estimated Annual Fuel Cost on the EPA Label: Assumptions and How to Adjust

February 23, 2026 8 min read

Quick Summary The EPA label’s Estimated Annual Fuel Cost is a standardized estimate intended for comparisons across vehicles. EPA explains in its interactive label that the estimate is based on assumptions shown in the fine print (including annual miles and fuel price in the example label). To make the number useful for your budget, you should adjust it using your annual miles and your local gas prices.

Great for apples-to-apples comparisons across new vehicles.
Not a promise—your cost depends on mileage, fuel prices, and driving conditions.
Easy to personalize with a simple formula or a calculator.

If you’ve ever looked at a window sticker and wondered “Is this annual fuel cost realistic?”, you’re asking the right question. The EPA label uses standardized assumptions so you can compare vehicles consistently—but your actual fuel bill depends on how much you drive, where you drive, and what you pay for gas.

Where the Number Comes From (EPA)

EPA explains the “Estimated Annual Fuel Cost” on its interactive gasoline vehicle label. The label includes a fine-print section that documents the assumptions used for the estimate.

For context on the rest of the sticker (City/Highway/Combined MPG, gallons per 100 miles, emissions ratings), see: Understanding the EPA fuel economy label.

What “Assumptions” Really Mean

“Assumptions” are not guesses about you. They are standardized inputs (like annual miles driven and an example fuel price) chosen so that every vehicle is evaluated the same way. In the interactive label explanation, EPA provides examples of those assumptions for the sample label.

Good to know: Even if you drive fewer miles than the assumption, the label can still be useful for comparison. You just scale the cost to your own mileage.

How to Personalize Annual Fuel Cost

You can build a simple personal estimate in two steps: estimate gallons used per year, then multiply by your average price per gallon.

Annual Fuel Cost = (Annual Miles ÷ MPG) × Price per Gallon

Use Combined MPG as a baseline, then adjust for mostly-city or mostly-highway driving.

Not sure which MPG value to use? Start with Combined MPG, then compare City vs Highway MPG based on your commute. See: Combined MPG explained.

If you want an even clearer “fuel used” view, convert MPG to the EPA label’s gallons per 100 miles metric, then multiply by your annual miles. We explain that metric here: Gallons per 100 miles explained.

Using Annual Fuel Cost to Compare Cars

The most practical way to use the label’s annual fuel cost is as a comparison tool:

If two cars have very different annual fuel cost estimates, the difference will likely show up in your real budget too.
If two cars are close, your results will depend more on your driving mix, speed, and conditions.

To translate any MPG and gas price into a commute budget, use our Commute Gas Cost Calculator. For road trips, see How to calculate fuel cost for a road trip.

Estimate Your Annual Fuel Cost in Seconds

Enter your miles, MPG, and fuel price to get a personalized annual fuel cost estimate.

Use the Cost Per Mile Calculator

Frequently Asked Questions

Why does my real fuel spending differ from the label estimate?

EPA’s fine print notes that real-world fuel economy and emissions may differ based on how you drive and maintain your vehicle, accessory use, weather, road conditions, and vehicle load. Those factors can shift your real MPG and fuel cost.

Should I use City MPG, Highway MPG, or Combined MPG?

Combined MPG is a good baseline for mixed driving. If your driving is mostly highway, Highway MPG may be closer. For mostly stop-and-go trips, City MPG can be more representative.

Can I use the label to compare a used car?

Yes. EPA describes used-vehicle label tools that let you look up official MPG and CO₂ information online through FuelEconomy.gov. See Learn about the Fuel Economy Label.

What’s a better metric than MPG for fuel cost comparisons?

EPA includes a fuel consumption rate in gallons per 100 miles, which relates directly to fuel used and fuel expenditures. See: Gallons per 100 miles explained.