CAFE proposal would add $5,000 to sticker price, NADA says

[MrSplitshot]

CAFE proposal would add $5,000 to sticker price, NADA says By Christina Rogers, Crain News Service


DETROIT (Jan. 18, 2012) — An Obama administration proposal to nearly double today’s corporate fuel economy (CAFE) standards could end up tacking on $5,000 to the sticker price of a new vehicle, a top official with the National Automobile Dealers Association (NADA) said Jan. 17. The proposal, which seeks to raise the CAFE to 54.5 mpg by the 2025 model year, would force auto makers to adopt costly fuel-saving technologies that could eventually price some buyers out of the new-car market, said Don Chalmers, chairman of NADA’s government relations committee. The car dealer trade association represents 16,000 new-vehicle dealers who operate 32,500 franchises.


A study NADA will release next month will show that the costs associated with the proposed higher fuel-economy standards will exceed the government’s projections by more than 60 percent, meaning consumers will pay on average $5,000 more for a 2025 model, said Mr. Chalmers, speaking in Detroit Jan. 17 at a public hearing on the proposed standards.


The hearing was one of three scheduled for this month, giving the public a chance to comment on the proposed rules before they’re finalized this summer. The other two hearings are on Jan. 19 in Philadelphia and Jan. 24 in San Francisco. The public also may submit written comments until Feb. 13.

Lots of support
The Obama administration’s proposal has received the backing of 13 major auto makers, the UAW and several environmental groups, including the National Wildlife Federation and the Sierra Club.


German auto makers Volkswagen A.G. and Daimler A.G. have opposed the proposal because it offers no new incentive for diesel cars.


U.S. regulators estimate the new 2017-25 model year standards will cost about $2,000 more per vehicle upfront, but buyers will save from lower gasoline costs in the long run.


Mr. Chalmers said the government’s figure is too low and doesn’t account for the realities of showroom pricing. A $5,000 increase, as projected by NADA, could add another $60 to $70 a month to a car payment, and in turn, hurt a buyer’s ability to get financing, he added.


“I want to sell more fuel-efficient cars,” Mr. Chalmers said. “If the customer can’t get financing, it makes no difference.”


Many others at the hearing voiced support for the proposed rules, saying the proposal would help save car buyers money, decrease emissions and reduce the nation’s dependence on foreign oil. General Motors Co., Ford Motor Co. and Chrysler Group L.L.C. spoke in support of the proposal.


United Autoworkers union (UAW) President Bob King said claims that the proposed rules would make cars expensive and hurt industry sales “inaccurate.”


“They should look at all the facts,” he added.


Citing numbers released last year by the U.S. Environmental Protection Agency, Mr. King said the proposal could save consumers about $4,000 over the life of a vehicle, including the higher upfront cost of the car or truck.


Larry Schweiger, president of the National Wildlife Federation, didn’t expect much opposition to the proposed rules.

‘Vulnerable to criticism’
“Whatever pushback we get is going to be very weak,” Mr. Schweiger said, “and frankly, vulnerable to criticism.”


Mitch Bainwol, president of the Alliance of Automobile Manufacturers, said consumer buying habits will test whether the industry can realistically meet these proposed standards. The Alliance, an industry trade group, represents 12 auto manufacturers, including the Detroit 3.


While many of the group’s members have backed the proposal, he stressed the need for a “rigorous” midterm review that will assess whether the rules fit fuel cost trends, technological advances in the industry and consumer buying decisions.


“Looking into the future, consumer purchasing patterns will be the biggest unknown,” Mr. Bainwol said.


This report appeared in Automotive News, a Detroit-based sister publication of Tire Business.

[roadrunner]

That may be a bargain by 2025, Obama and the environmentalist will have the price of gasoline to 10.00 if they get their way. This nixing the pipeline is the biggest bunch of BS ever. We have pipelines all over this country and guess what they have valves on them and if they leak you shut off the valve fix the leak. If you were a Muslim nation in OPEC and you hear this news do you raise your prices? Is Canada not going to sell oil or do you think they might find another buyer. Also we have huge finds of oil in Nebraska and Montana that could use the pipe line. Oh I forgot Warren Buffet owns the rail road that will have to be used to transport this oil. We should impeach this Chicago Mafia puppet and put the idiot Biden in charge. This steams me, what I want to say would get me kicked off the board.

[Devils Horse]

I've been priced out of the new vehicle market for 20 years. Makes me mentally kick myself in the hiney every time I think of the new trucks I've bought in the past.

The price for a decently optioned new truck is an eye popping figure.

I know people making $600+ a month payments, and I'm glad they're willing to do it. Gives people like me a good selection of used vehicles to choose from.

[GeoFisher]

I've been priced out of the new vehicle market for 20 years. Makes me mentally kick myself in the hiney every time I think of the new trucks I've bought in the past.

The price for a decently optioned new truck is an eye popping figure.

I know people making $600+ a month payments, and I'm glad they're willing to do it. Gives people like me a good selection of used vehicles to choose from.

I will NEVER have a 600 dollar payment for a CAR, or a BOAT. Hell my house payment is only a few dollars more than that.

I make pretty good money, and could easily afford that, but AFFORD today, poorhouse tomorrow......I have not purchased a new vehicle in years. My last brand new one was an Escort Wagon in 1995, I think.

Later,

Geo

[waterdog101]

I grew up dirt poor, and started working at a very young age. after wanting to see what it was like to own a brand new auto. I ended up buying 4 new trucks over a 20 year span. but for many years now, I've learned to buy used with very low mileage, and sale before it turned over 100,000 miles. and this way I drive a good truck at a reasonable price. the last truck I bought was a 02 gmc and it had 74, miles on it. I paid 7400.00 cash for it on craigslist. I drove it 2 years, and put 29, miles on it. and sold it for 7200. cash and sold it on craigslist with 103, miles on it. and I replaced it with another from craigslist, that books for 9600. and I bought it for 6350. I will never own another new one.

[Catfish Bob]

A 2002 GMC truck with 100k miles is just getting broke in. Them trucks will last 200k easy. I'm seeing a lot of late to mid 90 chevy trucks with 200k to 300k miles and still running strong.

[MrSplitshot]

I've learned to buy used with very low mileage, and sale before it turned over 100,000 miles.

Amen to that brother...


I've learned my lesson. I have a 2010 model that I bought with 12,000 miles on it....saved a ton versus buying a new one and you can't even tell the difference. I plan on keeping this one a good while though. It'll be paid off in 4 years with a lot of life left in her.


New cars are almost always a really big mistake based on impulse and wants...

[DJD]

Amen to that brother...


I've learned my lesson. I have a 2010 model that I bought with 12,000 miles on it....saved a ton versus buying a new one and you can't even tell the difference. I plan on keeping this one a good while though. It'll be paid off in 4 years with a lot of life left in her.


New cars are almost always a really big mistake based on impulse and wants...

I learned that long ago...I bought my Chevy pickup new in 1995 and it looks/drives great.
I will drive it until it drops dead.

[Chubminnow]

I have never purchased a brand new vehicle...and at the age of 50 I don't see me ever buying a new vehicle...we have 1997 Silerado and a 2000 Suburban, both 4- wheel drives, both paid for etc. I've been buying new body parts for the 97 model, new chrome, new bumpers, "newer" used doors that I picked up from a junk yard that are rust free, etc....cause I plan on keeping her a long time.

Even with the poor gas mileage we get, gas prices are going to have to be very high before it would be worth it for us to buy something newer and easier on gas, not to mention the higher tax and insurance rates we would have to pay for something newer.

Love my Clunkers