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I've tried this myself (driving in Tow/Haul) and I don't see any evidence of fuel economy improvement. I suspect this is because your best bet at increasing city MPG is coasting to stop lights/signs and down hills. Since tow haul locks the TC, it ends up acting as an engine brake which ruins the coasting MPG benefit.
it locks the torque converter sooner and holds it longer, when coasting to a stop if you have it in t/h mode, the TC will lock back up as it downshifts IIRC.
When towing?? Should you turn tow/haul OFF once up to speed?
Oh and I must add I love my Jake w/ a load on the truck We are dragging a 97 Escort home w/ probably 800 lbs of stuff in the bed. Hubby is actually letting me drive too I'm getting pretty quick at flipping that lever when it is time to slow down
Nope, leave it on. That way it it drops to 3rd it still locks your TC. Plus your jake is more effective with TH activated because it keeps the TC locked until almost stall.