New fuel economy rules might boost car prices by at least $5,000

Article by Christian Andrei, on January 17, 2012

It appears that the proposed fuel economy rules for model year 2017-2025 passenger cars and light-duty trucks are not seen very well by the car dealers. Why? Well, it is quite simple: the cumulative cost of all of fuel economy rules will raise the average price of a vehicle by $3,200 and the consumers will pay almost $5,000 more for a new vehicle. If the cars are too expensive, customers will not buy them and as a result, the automotive industry will go down and this could have real economic consequences.

“To work, fuel economy rules must require improvements that are affordable,” said New Mexico Ford dealer Don Chalmers, and chairman of NADA’s Government Relations Committee, at a joint Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) hearing in Detroit, Mich. “According to EPA and NHTSA, the cumulative cost of all of their fuel economy rules will raise the average price of a vehicle by $3,200. This is not pro-consumer.”

Chalmers also added that the rush to set new standards three years early will forgo the opportunity to learn how consumers react to the aggressive new numbers. EPA and NHTSA are holding two more public hearings in Philadelphia (Jan. 19) and San Francisco (Jan. 24).

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