The Gen 3 does better on the EPA test (in all measures) than the Gen 2. See Side-by-Side Comparison. Toyota has also stated that the 1.8L engine allows it to get better highway mileage than the Gen 2's 1.5L. The OP has a used Gen 2, NOT a new a Gen 3. We have little information about the OPs drives and a bunch of uncertainty. One can easily get sub-40 mpg tanks if there's are lot of short drives, esp. in cold weather. With my current driving, I'm in that camp now, so my lifetime avg is now ~45 mpg and falling. To see what CR got on a Gen 3 , go to Most fuel-efficient cars. Their Gen 2 results are at Most fuel-efficient cars.