Transmission quandry.
 

I have a 66 Mustang coupe that I picked up in the US last fall, it has a 289 in it with a 2 speed automatic. I don't know dick all about cars or transmissions but I was told that by putting a three speed automatic in it it'll probably wil improve my mileage a fair bit. ( the car is just for cruising, not for racing). My question is would it be worthwile doing, taking into consideration the way the price of gas is going. I already put bigger tires on, replaced the carb and the rear end. If I was going to change the tranny what model should I be looking for and how do you know you're getting a good one. The 2 speed was rebuilt in the states when I picked it up, cost me over 1200 US so I could probably try to sell it. Any suggestions would be appreciated.

A modern T5 could be installed easily. A buddy of mine did it in his 64, and greatly impoved his gas mileage.

It should not have a 2 speed automatic in it. It would have a C4 3 speed with the green dot shifter. This is different than the later shift patterns.

You are likely putting it the wrong detent and taking off in second.

oh oh. Hope all goes well

you could also go with an AOD transmission too, there was an write up in Mustang Monthly a little while ago about it, i'am also putting in a T5 in place of my original C4 in my 65..