This paper focuses on fuel economy improvement according to the type of power steering system. Usually, a conventional power steering system is directly driven by the crankshaft of the engine with a belt, known as HPS (hydraulic power steering). However, there is some inefficiency with this system at high engine speeds. To improve this inefficiency, automobile makers have developed two power steering systems: EHPS (electro-hydraulic power steering) and MDPS (motor-driven power steering) or EPS (electric powered steering). However, there has been insufficient study of effects of the type of power steering system on fuel economy. In this paper, the effect of the type of power steering system on fuel economy is studied experimentally, and calculations of the effect on vehicle fuel economy are presenting using computer simulation with AVL cruise software. The results demonstrate that a 1% vehicle fuel economy improvement can be achieved in a vehicle with an electro-hydraulic power steering system compared to a vehicle with a hydraulic power steering system. In addition, a 1.7% vehicle fuel economy improvement can be achieved using a full electric power steering system in a FTP-75 driving cycle. These results could be used to choose a power steering system.