New Fuel Standards, More Expensive Cars

President Barack Obama plans to institute national fuel efficiency standards, along the lines of what California requires in its state standards. And the auto companies are happy about it, reports Popular Science:

The auto companies have been begging for a nation-wide standard (along with a clear timetable for improvement) for years. Now that they have one, they can unify their production and save money by not having to manufacture more efficient cars for certain states.

Many consumers will be happy to know that by 2016 they will have a variety of more fuel efficient cars to choose from. And it will be nice to know that cars continue to improve in fuel efficiency. I wonder how many cars will, in seven years, actually beat the 35.5 mpg national standard.

However, not all consumers will be pleased with this push for greener autos. After all, there are estimates that these standards will force prices to increase an average of $1,300 per car. In the case of my Prius, which offers me gas savings of about $360 a year, it would take 3.6 years to make up the cost. It is worth realizing, though, that with cars that already beat the national average (our Prius repeatedly gets about 40 mpg), costs shouldn’t rise substantially. Well, unless already-efficient automakers decide that they want a piece of the action as well.

One would think, though, that as technology improves and more fuel options become available, the overall costs of fuel efficient cars should go down. My recent Prius purchase cost the same as any other comparable car, a little more than $15,000. So I would hope that the trend toward lower-priced, fuel-efficient cars would continue after this initial bump in price.

What do you think? Are greener cars worth a price increase of $1,300 per car?

image source: IFCAR via Wikimedia Commons