I know a lot of people that like to coast in neutral to save gas, but is it really the case? So I've looked around online and it depends.
If you are driving an older carburetted car, then sticking it in neutral would save more gas.
If you are driving a newer fuel injected car, then sticking it in neutral would actually use slightly more gas than if your foot was off the throttle but in driving gear. When the car is in neutral, the engine is still idling and using gas to keep running. Newer fuel injected cars have a fuel cutoff when coasting in gear.
However, it seems that the fuel savings for each case is miniscule.
Now in the case of stopping at an intersection and putting it in neutral. There should be hardly any difference between neutral and putting in in gear. This is because the engine is idling in both cases. But it seems that the consensus is that it does slightly save fuel at the stop to be in neutral, because there is less load on the engine.
It seems that people are saying that putting manual cars in neutral is okay; no wear on the clutch or transmission. However, for automatics, it can cause more wear on the transmission when you shift from neutral back to drive. So it might be a better idea to leave it in drive in automatics
Well, it seems that a lot of the internet is based on more opinion than fact. I have not come across any scientific tests with data, but what I wrote here is based on a general consensus.
Source:
http://www.popularmechanics.com/automotive/how_to/4230705.html
http://www.roadandtrack.com/article.asp?section_id=19&article_id=6578
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