LOL: “Assuming the price of gasoline stays about what it is today.”
Ahead of three public hearings on the Obama administration’s new fuel economy standards, the Consumer Federation of America (CFA) released a report yesterday that found higher standards will have immediate benefits for drivers’ pocketbooks.
The new corporate average fuel economy (CAFE) standards require a fleetwide average of 54.5 mpg by model year 2025. CFA’s new research shows that a buyer with a five-year loan on a car that complies with the 2025 standard would start saving money in the first month.
Savings on gasoline spending will outstrip the monthly cost of fuel-efficient technology from the start, said Mark Cooper, director of research with CFA, in a media conference co-hosted by the nonprofit group Consumer Reports.
By the time the five-year loan ends, Cooper calculated, the consumer will have saved an average of about $800. By the 10th year of ownership, assuming the price of gasoline stays about what it is today, the vehicle would generate an estimated $3,000 in consumer savings, most of which would go to the original owner.
“This is a consumer program,” said Cooper. “No doubt about it”…
The strong CAFE standards have broad support from consumer groups, environmentalists, labor unions and even a lot of automakers. According to the CFA report, the only real opposition comes from auto dealers, “who are fearful of losing the profits they made from older, fuel inefficient vehicles.”
Bailey Wood, spokesman for the National Automobile Dealers Association (NADA), says that when it comes to selling cars versus SUVs, however, the profit margins are within a couple of percentage points.
Wood also says he’s skeptical of consumer group surveys because they don’t account for different types of vehicles, miles driven and other factors that influence costs and benefits. Savings calculations also overlook the fact that 20 percent of new cars are leased, said Wood. The people who lease cars will never see the savings of fuel economy returned to them because they don’t drive the car long enough to reap the benefits, he said.
“As soon as people start realizing these things have a real and substantial cost to them, I think the perspectives will change.”