This chapter describes how recent increases in oil prices, concern about energy security, and apprehension over global climate change have turned attention to fuel economy policy in the United States (U.S.). The primary mechanism to reduce oil use in the U.S. is the set of corporate average fuel economy (CAFE) standards. Paralleling current concerns of more than three decades ago, the U.S. Congress was worried in 1975 about increasing imports on crude oil, especially from politically and militarily unstable parts of the world. One response was the Energy Policy and Conservation Act of 1975, in which Congress mandated for the first time that passenger cars and so-called light-duty trucks—pickup trucks, minivans, and sport utility vehicles (SUVs)—had to meet fleetwide CAFE fuel economy standards. Working in concert with sharply increasing gasoline prices in the early years of the program, the CAFE standards resulted in significant improvements in fuel economy for both passenger cars and light-duty trucks. In evaluating the costs and benefits of these policy actions regarding fuel economy, the key question is whether consumers or fuel economy policies are economically efficient. If policies to address the problems associated with fuel consumption are inefficient, they can be altered for improvement. Moreover, if consumers exhibit inefficient behavior in their choice of fuel economy in vehicles, those inefficiencies have important effects on the efficiency of fuel economy policies. Either way, the value of the current approach in regulating fuel economy in new vehicles as a cost-effective policy depends on whether or not consumers make inefficient choices.