The National Automobile Dealers Association (NADA) traces its roots to 1917, when 30 car dealers went to Washington, D.C. with the intention of convincing Congress that a luxury tax imposed on automobiles was an attack on the American way of life. Automobiles, they argued, were a necessity and not a luxury.
So it’s no surprise that the NADA still attempts to lobby Congress, and right now, their sights are set on the new EPA fuel economy standards. The organization has issued a statement, reflecting their concerns that added cost of new cars resulting from the new standards will price them out of reach of many consumers, and that the standards fly in the face of what kind of vehicles American consumers are choosing to buy:
America’s auto dealers support continuous improvement in the fuel economy of the fleet of vehicles that drive on the nation’s roads. To this end, we are concerned that adding about $3,000 to the average cost of a car will price millions of Americans out of the market, which could reduce fleet turnover and delay environmental gains.
This regulation gambles that millions of consumers will be able to afford thousands more for generally smaller, more expensive vehicles that may not meet their needs. This policy is contrary to what most consumers are actually buying today, despite the wide availability of more fuel efficient models. We need fuel economy policies that encourage the sales of fuel efficient vehicles, instead of risky mandates that frustrate consumer demand and depress fleet turnover.
The number one question that must be asked is: How many people will no longer be able to afford a new vehicle if the government raises the price of a new car by about $3,000? We will analyze the rule with this principal question in mind. We urge Congress to do the same.
New Mexico Ford dealer Don Chalmers, and chairman of NADA’s Government Relations Committee, testified at a joint Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) hearing that “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 went on to add that “while EPA and NHTSA can mandate what automakers must build, no one can dictate what customers will buy. If our customers do not purchase these products, we all lose.”
What do you think? Is the government taking tremendous risks by mandating higher fleet fuel economy from automakers? Could it jeopardize new car sales, and punish consumers by pricing new cars out of reach?