In short:
You should DFCO when you were already planning on braking or slowing. If you intend to maintain your speed or slow just a little bit, you should neutral coast for best FE.
Longer explanation:
DFCO uses zero fuel, but the engine keeps turning at the same RPM. The energy to pump air through the engine, push past internal engine friction, pump oil and water, etc...that energy all has to come from somewhere. By DFCOing at 2000rpm (or whatever), your engine has to turn more revolutions to get to your destination -- and those revolutions cost energy as described above.
If you neutral coast, you spend a little gas idling at 850rpm (or whatever), but you save a lot of momentum. The total amount of energy spent is less and your MPG is more.
DFCO behavior:
Many people think that DFCO is dependable and happens any time you're over 1000rpm, in gear, and the throttle is closed. In reality, there are many conditions that must be met. Examples:
- My 2002 GMC 5.3l V8 automatic - After 8 seconds of >1500rpm, DFCO will begin, and will hold down to 1000rpm. I don't have more detail because DFCO is so useless on it.
- My 2008 VW 2.5l I5 manual - DFCO is immediate after steady-state cruising above 1000rpm. If I've just shifted gears, or was accelerating heavily, or just bump-started, it won't DFCO. If I'm below 15mph it won't DFCO no matter how many RPM.
- Others' Hondas - DFCO lower limit raises to 1300rpm with accessories (A/C, wipers, etc) on.
I highly recommend using something like the fuel rate meter linked in my sig for learning your car's DFCO behavior. It's the only sure and accurate way I've found so far. You can train your butt to detect it by feel but it's imperfect. A ScanGauge can tell but there's a delay before it's displayed, and that lag can make it difficult to truly understand.
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