With the increase in demand of fuel efficient transportation system, various efforts have been made to collect waste energies to reduce the fuel consumption and emissions in the automobiles. Currently, in a typical internal combustion engine, approximately one third of the fossil fuel combustion by-product is wasted heat. By collecting the heat emitted through the exhaust systems using heat exchanger concept can be used to increase the passenger heating and comfort during cold ambient conditions as well as reduction of exhaust system surface temperatures. Lower exhaust surface temperature improves the durability of various under-hood and underbody components near the exhaust pipe. In this paper, the effects of integrating a gas/coolant heat exchanger close to the engine catalytic converter on reduction of the exhaust surface temperature for various real-world dynamic driving conditions are presented. The transient exhaust surface and component temperature for the vehicle under-hood and underbody are simulated with an exhaust heat recovery system (EHRS) and validated against vehicle level test data. Simulation results demonstrate the benefit of having lower exhaust surface temperature on component life improvement, when the EHRS is active. The reduction in exhaust surface temperature by using EHRS heat exchanger may also provide opportunity to reduce the overall vehicle weight by using thinner heat shield for the thermal protection.