Car prices are on the rise. I’ve often noted that when the leftists want to end something, they do not ban it outright. That would be unpopular. But, if they make it more and more expensive, they can still say you can do it- you just won’t be able to afford it. I wrote about this back in 2009.
Now, enter the auto industry. For decades, the Fed has made cars more expensive via safety, emissions, and fuel economy requirements. The safety regulations make the cars heavier, making mileage a problem, the emissions regulations made engine compression ratios go down, which also ruins mileage. Of course, you then have to do a ton of R&D, and add a bunch of additional equipment to make the cars meet all of the regulations. Then end result has been cars that are far more expensive that they need to be. Also, they have consistently prevented us from increasing domestic oil production, leaving us at the whim of foreign powers, and driving consumer costs through the roof. When you look at all of these in their totality, you can guess that, “Gee, seems they want to make it mighty inconvenient to own and operate at car!”
The Foundry has the current analysis.
The average price of a new car in 2012 was $30,500. Wondering why? One contributing factor is the new Corporate Average Fuel Economy (CAFE) standards.
All models from a single manufacturer must reach an average of 35.3 miles per gallon (mpg) by 2016 and 54.5 mpg by 2025. The current average is 29 mpg. We already knew federal fuel efficiency standards don’t reduce global warming, considering that not even cap and trade would have. We knew they don’t reduce dependence on foreign oil. And now, if we didn’t know it before, we know that they don’t help make cars affordable.
By the government’s own account, the stringent new CAFE standards will increase the average cost of a new car by $3,000 in 2025. The Energy Information Administration warned that new cars priced under $15,000 may no longer be available by 2025. Further, people who buy a new car this year are unlikely to ever realize any fuel savings.
So, as you can see, they are performing exactly as expected.
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Just in time for my getting ready to buy a new vehicle. Ugh.
There are a few factors at work:
#1 Cash for Clunkers wiped out most of the cheap cars from 3 or 4 years ago.
#2 Banks are still strict on lending for cars.
#3 The economy killed new car sales 2-4 years ago which means manufactures scaled down production which means fewer used cars on the market.
#4 Some cars are more expensive as the article says due to regulations.
#5 Scarcity of used cars = higher prices (supply/demand).
Career bureaucrats have the real power in this country. Those in the EPA are the worst!
Meanwhile the average used car is 10 years old. Welcome to the third world.
Cars are better designed and built today than they were 20 years ago. I don’t find that to be “third world” at all. Hell, the car I have is 21 years old and it’s very nice, quiet, and powerful.