The Corporate Average Fuel Economy (CAFE) regulations that President Obama announced last summer will make it impossible for 7 million lower income consumers to buy a new car according to a National Automobile Dealers Association (NADA) study released today.
“While you can mandate what automakers must build, you can’t dictate what customers will buy, nor can you dictate if a bank will make a loan,” New Mexico Ford dealer Don Chalmers said today.
Obama's proposed CAFE standards, which will begin taking effect in 2017, raise minimum average vehicle fleet fuel efficiency to 54.5 mpg by 2025. The Environmental Protection Agency and National Highway Traffic Safety Administration estimate that this regulation will raise the average price of passenger cars and light trucks by $3,000.
“The unintended consequences of the proposed fuel economy increases are clear,” NADA Used Car Guide analyst David Wagner said. “If the price of a vehicle goes up by the government estimate of almost $3,000, millions of people will no longer be able to finance a new vehicle.”
Not only would Obama's fuel efficiency regulations make it impossible for lower income Americans to afford new cars, but it will also increase deaths. The Heritage Foundations's Diane Katz explains:
Some fuel-efficiency gains would likely result from drive-train re-engineering, improved aerodynamics, and reduced tire resistance. But as in past years, weight reduction would be unavoidable. And with downsizing comes risk.
In past years, the structure of the regulations induced automakers to dramatically downsize some vehicles to meet the standard, which increased traffic fatalities by the thousands.
Obama's higher standards probably will not help the environment either. Katz explains:
To the extent that the standards increase sticker prices, consumers are more likely to continue using older, less fuel-efficient vehicles. A host of research also documents that increased fuel efficiency, by lowering the cost of driving, actually increases travel—thereby negating at least some of the supposed environmental effects.