I disagree, and so does Click & Clack. They maintain, and I agree, that constant movement back and forth translates to reducing pressure,then increasing pressure on the clutches within the transmission (and on the seals of the transmission as well. It is better to have a steady pressure (in Drive, for instance) than to have abrupt changes occur.
Actually, the engine runs a little faster (rpm) in Neutral than in Drive,(watch your tach and you'll see what I mean) so it will use more fuel (not much, but a wee bit more).IMHO.
I would guess that fuel wise it is going to be a wash, that slight increase in RPM that Kimoeagle talks about is really the same amount of fuel through the system, just without the wear and load of the clutch plates and torque converter slipping when in gear. That being said, I hadn't considered the extra wear and tear on the AT that moving the gear selector back and forth might create, but those same clutch plates and torque converter have a limited life and leaving them spinning and slipping for an extended period of time definately decreases their life.
I pull my AT into neutral at a rail road crossing when there is a freight train crossing or anywhere that I'm going to be stopped for more than a minute or 90 seconds, other than that I leave it in gear, especially at stop lights or anywhere that I may have to get moving again quickly. This is because it takes a few seconds after a shift for the fluid pressure to build back up in the Tranny and keep it from slipping, I don't want the light to turn green, drop it into gear and put unnecessary wear on the tranny while the pressures stabilize.
My Scangauge shows that shifting to neutral almost halves the fuel usage while sat idling. I did this on my '98 Grand Cherokee for almost 190k miles without a problem on what was considered to be a very weak transmission (42RE).
You all have me worried. Not only do I put my AT in neutral at lights, I do it while heading downhill on the road. That includes all sorts of speeds, where I drop it into neutral and pull it back into drive once I lose speed at the bottom of a hill. Is this foolish?
Going downhill with the transmission in neutral causes several problems.
1: You waste fuel, cause now the computer has to keep the engine running at idle, whereas with it in gear, it can actually cut the fuel completely, at least with most modern vehicles.
2: You lose control. Having the engine engaged keeps the vehicle under better control down a hill. Hence the term "downshifting". This is done to keep the speed from increasing too much. Too much downhill speed and if you suddenly get confronted with a need to stop, this means you will try to use your brakes. There is a chance that you could actually lose the ability to brake completely as downhill forces and speed could heat them up quick.
Keeping the engine engaged, or even putting it into a lower gear, helps you slow down without burning your brakes up as much.
Hope that helps. There are several posts on here that already have beaten these topics to death. lol
If I watch my RPM gauge when stopped and in drive, it idles around 1000 ish. With it in neutral it idles around 2200. If that any indication, I think I am using more fuel just based on the higher RPM's.