So I've read around and found that 225/45R17 increases handling abilities, because of its wider width, but it also decreases gas mileage. Why is that?

Is it because of the bigger overall diameter of the tire compared to stock? If this is true, does that mean that 225/40R17 should correct this?

Or am I completely off, and the overall diameter has nothing to do with it?

 

Size wize, it would actually improve gas mileage, due to effectively changing the ratios because of the larger rolling diameter.

However, the improvement would be very small since the diameter is only slightly larger. More importantly, when people upgrade they usually get stickier tires too. That, combined with the wider tread, generates more rolling resistance, which often more than offsets any improvement due to the diameter.

I basically see it as a "YMMV" situation.

 

^^ Yeah what he said, but to simplify it...Basically, MPG is neglegable in comparison to tire SIZE,There are too many other variables. Just make sure they are inflated properly, and if you want to spend the 25 Bucks or so, go to a certified installer that carries nitrogen?? I think thats what they use. Inflate the tires with that and it is "guaranteed" to give 2-3 MPG over just plain air.