Most modern automatics will keep the engine locked to the drive wheels (when the torque converter clutch is locked) so that fuel cut is available. The fuel injectors can't be switched off unless that direct coupling is established so that the spinning drive wheels can transmit torque (rotational force) backwards through the transaxle and converter to the engine crankshaft. In effect, it uses the car's momentum to spin an engine that is "off" - not burning any fuel. You will notice when the car is in D and you're coasting down, the car will downshift when the tach needle falls below about 1500, and you will also notice that this downshift is more abupt than other downshift/upshift events. And that's because the downshift is minimizing "overlap" as one clutch releases and the other applies, which is needed to ensure that enough torque continues to flow to the engine to keep it running. There is no right or wrong here, but there are times when N and D each have their place. There are two options for coasting (car is moving, engine running, foot not on the gas pedal): Drive - When in drive, and above about 35mph, with the engine fully warm, the fuel injectors will shut down and the car will lose speed faster than in would in neutral. I use D when I need to lose speed, as in approaching my exit, or a cluster of slowing traffic, or for light timing. It also is useful when heading down hills where neutral would cause the car to gain enough speed to exceed the posted limit or reach the point where the gain in momentum is offset by the increased air drag (where it is then being thrown away). Neutral - When in neutral, the engine idles and the car will continue to roll due to inertia and - in case of downhills - gravity. Loss of forward speed is due to air drag, tire rolling resistance, and other mechanical resistance (disc brake drag, wheel bearings, transaxle final drive/rear gearset, etc). Engine drag is out of the equation, and so is ATF pump and torque converter energy loss, although fuel consumed by the idling engine is being used to overcome those losses. Depending on forward speed, the car will be getting between 80 and 200mpg when in N. Because of the decreased resistance, I use N when I want to glide for a longer distance with minimal loss of speed. On those slight downgrades (hill and dale), N is perfect for gliding down the hill with no loss of speed. On steeper downgrades, if you shift to N and the car then begins to exceed the posted limit, shift to D and the car will go to fuel cut after a few seconds. Which is better? Sometimes both. Depending on traffic volume, I will crest a steep hill at the minimum PSL (usually 40 in interstates) and then NICE-on down the other side until I reach the max PSL. If I'm still heading down the hill when I reach that max, I return to Drive for some fuel cut while holding that speed. When approaching a light that is (or will soon be) red, I will use Drive (and fuel cut) until speed falls to about 25mph. At around 25, when fuel cut drops out, and then shift to N to continue the glide at 25mph, if that is appropriate to arrive just after the light goes green. If more time will be needed before the light goes green (and three-ahead light timing can pay off big time), I will manually downshift, blipping the lever each time the tach gets to 1500. If you downshift while the car is in fuel cut, it will hold onto it down to much lower speeds, and this slows the car very effectively while keeping the injectors offline. Remember when downshifting that your car will slow without any brake lights or other signs to alert the tailgating Chatty Cathy cell phone addict behind you, so it's wise to keep an eye on the rear view mirror to make sure the downshift won't cause trouble for anyone behind you.