Jan 18th, 2012 by Ross Edwards
The Obama administration has proposed a new fuel economy standard that could add up to $5,000 to the price of a new car. The proposal would raise the corporate average fuel economy (CAFE) standard to 54.5 mpg by 2025.
Cars with an average mpg rating of 54 sounds like a great thing for consumers, but the expensive technology involved in bringing the fuel economy to that level will add a significant amount to the price of a new car. The Obama administration claims that prices should only rise by about $2,000 and that the extra cost will be easily mitigated by the gas savings, but the National Automobile Dealers Association (the same NADA that prints the little orange books you’re familiar with if you’ve ever tried to trade in a car) claims prices could go up by as much as $5,000.
UAW President Bob King told Automotive News that the proposal could save customers more than $4,000 over the life of a car, even taking into account the added up front cost. The real question is whether customers will be OK with the higher sticker price when it means fuel savings.
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