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Just about every car I've owned, I've put an underdrive pulley on. Only 1 of all of those made little difference for acceleration: My 89 2.5L turbovan. It made a difference, but wasn't much in comparison to, say, the 1.5L Scion xB. That one was a HUGE difference. My Neons (1st and 2nd gen) have all shown positive gains in performance. The RPMs climb noticeably faster, that's for sure.
As for MPG, in theory, it should help. Though, I don't know how much real-world gain there is. Probably depends on existing setup and driving style more than anything, but figuring that you will hit your destined speed soon, that's less time throwing fuel at acceleration. It's less rotational mass on an idling engine, which should make your IAC valve close just a touch more when at idle. All good things.
I have never seen any damage come from an UDP. Though, I have seen where a belt was too tight and perhaps some sand or something got in there... sheered off one of the groves complete! On a high-end brand, to boot! But that wasn't my vehicle and all of the ones I've used/installed have been bulletproof.
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