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NADA spells out concerns with looming fuel-economy rules

July 20, 2012
Fuel economy rules proposed by the Obama administration on Model Year (MY) 2017-2025 cars and light trucks were reviewed at the White House’s recent “Advanced Vehicles, Driving Growth” summit with automakers, environmentalists and government officials.
The NADA has raised a number of issues during the ongoing debate:
Are consumers able and willing to pay almost $3,000 [Obama administration estimate] more on average per vehicle in 2025 to get better fuel economy?
The cumulative average per vehicle cost of the MY 11, MY 12-16, and MY 17-25 fuel economy rules approaches $3,000 per vehicle. (MY 11: 74 Fed. Reg. 14413 - $95; MY 12-16: 75 Fed. Reg. 25635 - $945; MY 17-25: 76 Fed. Reg. 74889 - $1,896 - all prices adjusted to 2010 dollars.)
Will new graduates and working families still be able to buy a new car or truck?
Vehicles that currently cost $15,000 and less could be regulated out of existence. (U.S. Energy Information Administration, “Annual Energy Outlook 2011,” Page 27.)
With upwards of 90 percent of new vehicles financed in some way (auto loans and leases), how many fewer working families will still qualify for a loan in 2025?
The NADA’s research shows that 6.8 million Americans no longer would qualify for financing to purchase the most affordable new vehicles should prices escalate an additional $3,000. 
Will there be broad consumer acceptance of hybrid and electric vehicles?
Hybrid sales have never amounted to more than 3 percent of sales in any given year. For automakers to comply with the MY 17-25 mandates, 15 percent of the vehicles sold must be hybrids or electrics. (76 Fed. Reg. 74860)
When will families achieve the ‘$8,200 in fuel savings over the lifetime of a new vehicle’ that is promised?
To achieve $8,200 in fuel savings, the Environmental Protection Agency estimates that a consumer would have to drive the vehicle 211,000 miles during its life. (EPA, Draft Technical Service Document, Pages 4-17, Nov. 2011)