The key is that going from 10- to 20-MPG yields higher savings -- which means less money spent on fuel -- than going from 25- to 50-MPG. The former swap yields $25 dollars in savings over 100 miles, the latter yields just $10 in savings. However, if you know that one car uses 5.5 gallons per 100 miles, and another uses 3.5 gallons per 100 miles... then you immediately know which one will cost you less at the pump.
Of course, this all depends on what kind of car you're starting with in the first place. Researcher Richard Larrick said, "We were trying to decide whether to get rid of a minivan and go for a station wagon versus getting rid of a sedan and going for a really high-mileage hybrid car. We realized in the end we were better off trading in the minivan and only gaining 10 miles per gallon then we would be trying to swap out the sedan for a highly efficient car." Thanks for the tip, Stephen!