President Obama’s “green” agenda is going to hit your wallet hard. That’s because stringent new fuel efficiency regulations make cars more expensive.
The average price of a new car in 2012 was $30,500. Wondering why? One contributing factor is the new Corporate Average Fuel Economy (CAFE) standards.
All models from a single manufacturer must reach an average of 35.3 miles per gallon (mpg) by 2016 and 54.5 mpg by 2025. The current average is 29 mpg. We already knew federal fuel efficiency standards don’t reduce global warming, considering that not even cap and trade would have. We knew they don’t reduce dependence on foreign oil. And now, if we didn’t know it before, we know that they don’t help make cars affordable.
By the government’s own account, the stringent new CAFE standards will increase the average cost of a new car by $3,000 in 2025. The Energy Information Administration warned that new cars priced under $15,000 may no longer be available by 2025. Further, people who buy a new car this year are unlikely to ever realize any fuel savings.
Fuel efficiency standards are another example government policy making goods and services needlessly more expensive. But Tubb reminds us that “economic and environmental goals are not mutually exclusive.” For positive steps on how to improve the environment and the economy, check out Heritage’s Energy and Environment page.
Have fuel efficiency rules hurt your bottom line?