Just changed out my old fuel pump in my 99 silverado ls 4.8V8 and the app on my droid (carproject) says i'm averaging 11.5-11.8 mpg, this is mostly highways miles! I already plan on getting a cold air K&N filter. I need advise on WHICH filter/package to get and what else I can do. These gas prices are raping me. Topped off tank is taking $60+, help me out here.
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A CAI won't gain you much in terms of gas mileage. Sounds like you need to clean-up other things under the hood first. You should be getting better mileage than what you've stated in your post.
Lots of things can contribute to poor gas mileage. Mostly these are related to sensors that may still be working (no trouble codes) yet they are old and on the verge of failing. O2 sensors for example. When these get older (~100K miles), they may be going out but don't trip trouble codes. Thus, they send signals to the control module (the PCM) which in turn interprets the signals incorrectly and sends more fuel to the injectors than is needed. Your gas mileage suffers as a result.
That's one example. Other sensors, such as the mass air filter (MAF) and the manifold absolute pressure (MAP) sensors, can do the same thing resulting in the PCM interpreting input data incorrectly and applies the incorrect fuel delivery to the system. Unless you have the right type of scan tool, troubleshooting which sensors to replace will be difficult.
Cleaning the MAF, the throttle body, and replacing the spark plugs would be a good start at resolving your mileage issue.
If you are dead set on a filter solution, I would recommend a K&N drop-in filter versus the CAI route. I have the K&N CAI and didn't see any significant gains (MPG or HP) other than a cool sound from under the hood. There are several posts about this and I should have read them before purchasing my current K&N system.
Others on this site may have other suggestions. You definately have a problem with you gas mileage. I hope you can get that up around 16-17 mpg, or better, on average where it should be. Good luck.
Sadly, my truck has 173K miles and the service engine light has been going on and off for literally 4-8 months now. I have run the code 3x and each time the O2 sensors came up, I guess I just didn't consider those a big deal. All plugs and wires have been replaced, actually the only small thing that needs replaced still is the air filter. Other than the O2 sensors...she runs like a champ! Could that be my big mpg issue?
Your O2s may not be at fault with those codes. Unmetered air could be getting into your intake system and cause those codes. Exhaust leaks near the forward sensors (between the cat and the engine heads) can possibly trip those codes as well. The MAF may also be giving the PCM an incorrect signal. If the PCM interprets the sensor signals as a lean condition, it will dump more fuel into the system to richen up the mixture.
Leaking intake gaskets, cracked or disconnected vacuum lines, or a loose intake tube are some of the usual suspects. The O2s are still possible suspects since they are old and probably weak. A dirty MAF will mess up it's signals to the PCM.
Check for vacuum leaks. Insure all the vacuum hoses are connected and in good shape. Check the intake tube between the air filter box and trhottle body and insure it's all tight. With the engine running, spray some starter fluid around any seams to the air intake system. If the RPMs increase suddenly when you spray, you've found the lead. You could try re-torqueing the intake manifold and throttle body bolts as well.
Inspect your exhaust system for leaks. Especially around the forward sensors. Insure the exhaust is tight and your gaskets aren't blown through at the exhaust manifold.