When I drove a manual transmission, I got in the habit of shifting to neutral on long, shallow grades to save fuel. Now I'm driving an automatic (specifically, a recent Corolla) and still doing it.
But someone told me recently that being in neutral while moving can cause an automatic transmission to overheat, since the fluid is not being circulated.
Is this correct?
I don't think it will make a difference on gas mileage either way. Anytime the engine is running the front pump on the transmission is being turned by the torque converter and is lubricating the transmission which is also circulating fluid through the transmission cooler.
I don't see how it could cause premature failure of the transmission. Technically you are shifting out of gear and back into gear one extra time when you decide to do this, but it's not really any different that a regular shift so it shouldn't cause extra wear.
Auto transmissions are designed to operate similarly to manual transmissions. If you are coasting with an automatic transmission, all you are doing is the same as when you coast with a manual transmission.
It cannot damage the box if the engine is running and your transmission pump is working.
But the downside is: do not try to put it into D when in high speed, because that can burn your clutches gradually by making them slip when they are engaging at high speed.
And that will make a hole in your pocket.
Theoretically it cannot damage the box, but is better to follow the guidelines in your vehicle's manual for your own safety.
(edit to original answer, theoretically you are giving out incorrect information. it can and most likely will damage the auto trans if it is towed, if you don't know the correct answer then don't say)
In modern automatics, you should go downhill in D, not N. The reason is that the ECU/TCU is programmed to detect situations in which the wheels are driving the engine (e.g. when downhill or coasting to a stop) and to shut off the fuel injectors, hence zero fuel consumption. If you switch to N, some fuel has to be used to keep the engine idling.
It is fine to coast in an automatic in neutral as long as the engine is running. If you stop the engine completely and coast (as is often the case when being towed), you can damage the transmission.
The reason is that the transmission circulates fluid for lubrication and cooling, and this circulation is powered by the engine. Rotating the drive wheels (coasting or being towed) without the engine running causes transmission parts to be moving without sufficient lubrication or cooling, which will wear them out much more rapidly.
It all depends on the vehicle in question as to whether it saves fuel, and/or is detrimental to the auto tranny.
As long as the engine is running, it is rotating the torque converter, which in turn is pumping fluid around the auto box. This keeps all the bands, clutches, servos etc lubricated no worries. When going back into gear, if you're not rolling up to a stop sign or red light or similar, it may help to increase the engine revs a little to match the revs the vehicle would be doing at that road speed. This will reduce any shock loading on the internals.
As for saving fuel, it depends on the vehicle, carbie cars, and early injected vehicles, it will definitely save fuel. On later vehicles, with more sophisticated electronics, Your mileage may vary. Some vehicles will cut fuel to all/most injectors in a closed throttle position. Where as at idle, and in neutral, all cylinders are getting fuel to keep the engine running smoothly.
I once read on another site that someone who got in to the habit of shifting in to neutral at every possible occasion ended up wearing out some mechanism in the transmission. Other than this, no it will not harm the transmission at all. The engine continues to operate the transmission fluid pump. Some old transmissions even had dual pumps so you could tow the vehicle long distances without the engine running.
A word of warning: In some States in the US there are laws against coasting down hills in neutral. I would imagine this has to do with increased use of brakes, causing a safety or liability issue. Leaving the engine in gear does generate a some drag. You should put the engine back in gear rather than applying the brakes for a long distance.
