Here is how I finally figured it:
Car in gear, moving X MPH, you need to come up with enough energy to keep the car moving at that speed, and keep the engine moving at n000 RPM.
Car coasting in neutral with engine on, moving at X MPH, you need to come up with enough energy to keep the car moving at that speed, and keep the engine idling at 800 RPM.
Since all other things are equal, more energy is used keeping the car in gear. The "savings" from stopping fuel flow to the engine while in gear is an illusion, because (as thatvwguy points out), it is stolen from somewhere else.
That having been said, coasting in neutral always makes you go faster than coasting in gear. If you got fast enough, then the dramtically increased air drag might start to count for more than the increased RPM drag.
But, to bring it back to the real world. Since I have started doing all my coasting in neutral, I have gained 5 to 10 MPG.
thatvwguy said:
Yes, but it will be slowing the car down due to the internal friction of the engine and the resistance of the compression. That is my point - you cannot coast in gear as far/fast as you can out of gear. Anything that slows you down negatively impacts your potential mileage.
If you don't believe me find a hill in a remote area. From a dead stop with the engine not running coast down the hill in gear, make a note off where you stop then drive back up to the top and repeat with the engine off and not in gear. I will bet you a million dollars you will go further and faster not in gear.