NADA calls for more information to car buyers to understand and appreciate fuel economy rules
The National Automobile Dealers Association (NADA) told two federal agencies today that car buyers would benefit from more information on the pay-back equation for federal fuel economy rules.
At the second of three public hearings on proposed fuel economy rules for model year 2017-2025 passenger cars and light-duty trucks, which calls for corporate average fuel economy of 35 miles per gallon, NADA director and Delaware dealer Bill Willis stressed that fuel economy performance was important but typically not high on a customers list of priorities.
When prospective purchasers come to my new vehicle showrooms, they rarely, if ever, spend time working out the pay-back analysis of higher fuel economy and higher vehicle costs, Willis said at a joint hearing held by the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) in Philadelphia. First and foremost, they are looking for vehicles that meet their needs and that they can afford.
NADA remains concerned that as vehicle prices on new-cars and–trucks are expected to climb an average of $3,200 (EPA estimate) to $5,000 by 2025 as a result of fuel economy increases beginning in model year 2011, buyers may have difficulty seeing a return on their investment.
Any pay-back will depend on several variables, including the number of miles driven and fuel prices, Willis added. He noted that even customers who are not credit-constrained and who care a lot about fuel economy need more information on upfront costs to do a reasoned pay-back analysis.
Next month, NADA intends to release a detailed analysis of the proposals impact on sales, especially with respect to certain sensitive market segments. This report will also contain an analysis of the real-world role fuel economy plays in customer decision making, and of the willingness and ability of prospective new vehicle purchasers to pay higher prices for vehicles offering improved fuel economy performance.
Bottom line NADA told the panel: consistent with the Consumer Information section of the Energy Policy and Conservation Act, we urge NHTSA and EPA to explore in this rulemaking how to provide prospective purchasers with the all of the information necessary to conduct transparent pay-back analyses. Click here for NADA’s full testimony.
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