Have you heard about the Gas Guzzler Tax? Are you scratching your head? The rule was designed to encourage consumers and automakers to be more aware of fuel usage. Still, because of its archaic origins, it has complicated matters for everyone affected.
When a new car doesn’t achieve the minimal fuel economy threshold values, producers must pay a “Gas Guzzler Tax charge.” The Energy Tax Act of 1978 included provisions known as the “Gas Guzzler Provisions” designed to deter manufacturers from creating and consumers from buying fuel-inefficient cars.
Although you won’t be directly responsible for footing the gas-guzzling cost, you will pay for a more expensive line item on the ticket for your new car. If a vehicle is subject to GGT, you will see it clearly labeled in the EPA fuel economy section on the official Monroney window sticker. This sticker is usually found on the car’s side window at the dealership.
We’ll go over everything. This includes the tax implications, which cars are affected, and how to get a cheap auto insurance plan to reduce the tax burden.
What cars are considered gas guzzlers?
The term ‘gas guzzler’ is used informally to describe cars that get comparatively fewer miles per gallon (mpg). Typically, these cars consume (guzzle) a lot of fuel and are more expensive to own because you’ll need to spend a lot on fuel. They also produce more emissions, which adds to air pollution. If you’re thinking of buying a new car, we’d advise you to give cars with really bad mileage a wide berth. If you already own one, sell it – like yesterday!
These types of vehicles usually find themselves on the gas guzzler list:
- Vehicles with large engines, like V8, V10, or V12, or those with superchargers and turbochargers.
- Less aerodynamic, boxy designs create more drag and make the engine work harder
What does the Gas Guzzler Tax mean?
The Environmental Protection Agency (EPA) rates vehicles with poor fuel economy ratings, and this additional cost is known as the “gas guzzler tax.” The fee varies from $1,000 to $7,000, depending on each car’s efficiency. Notably, the gas guzzler tax has only ever applied to passenger cars.
Did you know?
The Gas Guzzler Tax has not been updated since 1991, even though fuel standards and vehicle technology have changed.
How the Gas Guzzler Tax works
The combined city and highway fuel efficiency of a car, which must be higher than 22.5 mpg, serves as the basis for the gas guzzler tax. Before sales start each year, every automaker must ascertain its vehicles’ fuel efficiency ratings. They must then follow the EPA’s rules to compute the tax for each application model.
The actual tax is calculated depending on the number of gas-guzzling cars sold after each model year’s production cycle. The manufacturer or the importer is responsible for paying the total tax amount after it has been computed.
Here’s the full Gas Guzzler Tax schedule based on combined city/highway MPG (using the older 2-cycle method).
| Combined MPG | Tax Amount |
| < 12.5 | $7,700 |
| 12.5–13.5 | $6,400 |
| 13.5–14.5 | $5,400 |
| 14.5–15.5 | $4,500 |
| 15.5–16.5 | $3,700 |
| 16.5–17.5 | $3,000 |
| 17.5–18.5 | $2,600 |
| 18.5–19.5 | $2,100 |
| 19.5–20.5 | $1,700 |
| 20.5–21.5 | $1,300 |
| 21.5–22.5 | $1,000 |
| ≥ 22.5 | No Tax |
Important note:
The MPG (miles per gallon) shown on a car’s window sticker comes from the EPA’s newer 5-cycle test. This test includes faster speeds, air conditioning use, and cold starts. However, the Gas Guzzler Tax is based on an older 2-cycle method that only considers city and highway driving. This can lead to higher MPG numbers. As a result, some cars might seem to meet the tax threshold on the sticker but actually avoid the tax because of how the calculations are done.
What to keep in mind about your car
It would be best to read the window labels on the cars you’re thinking of leasing or purchasing, given the current high cost of gas. The gas guzzler tax won’t be directly your responsibility, but it will increase the cost of some cars at the dealership.
We found that only 30 car models from 8 manufacturers still need to bear GGT (Gas Guzzler Tax) as per the EPA’s 2025 Fuel Economy Guide.
Gas Guzzler Tax-affected cars
According to the 2025 EPA PDF, the Gas Guzzler Tax affects 30 car models from major manufacturers. These include performance-focused brands like Ferrari, Porsche, Mercedes-Benz, Ford, and Chevrolet.
| Manufacturer |
Number of Taxed Models
|
| Ferrari | 7 |
| Porsche | 4 |
| Chevrolet | 3 |
| Mercedes-Benz | 3 |
| Ford | 3 |
| Bugatti | 1 |
| BMW | 1 |
| Lamborghini | 1 |
Cars exempted from the Gas Guzzler Tax
SUVs, pickups, and minivans are exempt from the tax because it only applies to passenger cars. Popular models like the Subaru Forester, Mazda CX‑5, Chevrolet Equinox, Ford Explorer, and Jeep Wrangler aren’t subject to the Gas Guzzler Tax, not because they’re especially fuel-efficient, but because they’re classified as SUVs or light trucks, which are excluded from the tax under current EPA rules.With rising fuel prices and changing financial needs, every dollar matters. Way helps car owners control their expenses. How, you ask? We help you find better insurance and refinancing rates. That’s not all. The Way App helps you track mileage and get cashback on gas. Think of the Way app as a smart savings assistant in your pocket. Whether you have a long commute or want to stick to your budget, we’ll help you drive smarter and spend less without sacrificing convenience.
Sara Sam may not look like your typical car and finance expert, but don’t let that fool you. With over four years of experience in the industry, she knows all the ins and outs of cars, car insurance, and refinancing. You can trust Sara to help you navigate the often-confusing world of automobiles and financing.
