New CAFE standards help consumers save big

Experts

Policy Counsel, Energy and Environment
Senior Communications Associate, Energy Policy

By Jason Kuruvilla on Wednesday, September 7th, 2016

Since 2012 when the current fuel economy rules were put into place, new cars and trucks have made great progress in boosting fuel efficiency. Now, federal and state officials are hoping to build on this progress by finalizing new standards for model years 2022-2025. Meeting the standards requires automakers to adopt new technologies. So the question is: are the costs of these technological enhancements worth it for consumers? And what impact does low gas prices have on the fuel savings consumers can expect?

In July, officials at the Environmental Protection Agency and the National Highway Traffic Safety Administration released a draft report on the technologies in the market today and how automakers can meet the new standards. The report found that much of the technologies needed to meet the standards already exist in the market now and that automakers were making great progress in deploying those technologies in new cars. In fact, a number of cars on sale today already meet the fuel efficiency goals for 2022-2025. Their report concluded that this progress means automakers can meet the standards and do it at a lower cost than they initially projected in 2012.

At Consumers Union, we want to know what this means for consumers. Obviously, it is good news that the federal report suggests the standards can be achieved at a reasonable cost. But factoring the cost of the technology and the expected fuel savings – will new car buyers come out on top? If so, how much will they save?  And when?

It turns out the answers are 1) Yes.  2) A lot. And 3) Immediately.  

2025 Fuel Savings Graphic

In a new report out today, Consumers Union finds new car and truck buyers can expect net savings soon after purchasing a new car. Since most buyers take out loans to purchase a new car or truck, the costs of the new technologies are spread out over the length of the loan. The fuel savings are so significant, even with low gas prices, the report estimates that gas savings will outweigh technology costs in the first month and continue after that. Over the life of a vehicle, consumers can expect to save between $3,200-$4,800. If gas prices rise to more typical levels, the savings will be even greater – up to $8,200 per vehicle.

These savings mean consumers have more money to spend on things they actually want or need.

So it is all the more confounding that some automakers continue to argue against higher fuel economy. They say that the costs for meeting the standards are too high, contrary to what was found in the exhaustive federal report based in large part on automaker-supplied data.  They argue that consumers aren’t interested in more fuel efficient vehicles. But that’s the opposite of what we found in our recent national survey, which showed that nearly 80% of all Americans want higher fuel efficiency in their next vehicle purchase and fuel economy was the number one attribute car owners would like to see improved. Even consumers who buy trucks and SUVs expect more fuel efficiency in new vehicles.

Consumers Union supports strong fuel economy standards because they provide significant consumer savings. And given the clear benefits of the standards for consumers, we hope automakers honor their commitment to increasing efficiency and continue the progress they are making in producing cleaner cars.

24 responses to “New CAFE standards help consumers save big”

  1. Ann Dempewolf says:

    Consumers Union is giving misleading information. Cars and truck emissions are NOT the main source of carbon pollution. As a matter of fact, auto emissions are a drop in the bucket when you compare it to the carbon pollution emitted by agriculture and factory farming.
    And a big source of agricultural pollution is from the growing of corn to be made into ethanol as a gasoline additive. So you add more pollution and get less miles per gallon with ethanol. If you’re going to pollute the planet with corn farms, it would make sense to use the corn for its original purpose or send the corn to third world countries where people are literally starving to death. Stop adding ethanol to gasoline and immediately people will get higher gas mileage without automakers having to build cars that get better gas mileage and pass the higher cost onto the consumer. Speaking of consumers. . .i am very disappointed in what CU has become. No more honest and unbiased information given out to us consumers. Now they want us to sign their BIASED petition. No more purchasing Consumer Reports for me. I’m done.

  2. Eric M says:

    If the EPA and other environmental regulatory bodies would get rid of carbon credits, I might care what they think. I as a consumer must make sure my old car meets emission standards. There is no carbon credit for cars. I can’t buy a Prius and use its carbon credits to offset a car I removed the emission equipment on. but power plants and polluting factories can.

    People who feel guilty about their carbon footprint can even buy carbon credits.

    If the EPA and other regulatory bodies actually cared about the environment, they would get rid of carbon credits and force every polluter to comply, not just automobiles.

    And for the people who think electric vehicles are less polluting, that depends on how much fossil fuels were used to generate the electricity to drive your car. You have to figure the carbon offset of the power plant which may or may not comply with emissions standards. If you have solar cells powering your electric station at home, then you area doing your part. What if you plug it in at work? Is that also clean electricity?

    E85 cannot be used in older cars or it will muck up the fuel system.

    I can go downtown and get any drug I want, but can’t buy R12 for my vintage car and none of the certified A/C techs can either.

  3. BUTCH says:

    iF LEFT TO THE AUTO INDUSTRIES THEY WOULD RUBBER STRAP A 24 CYLINDER ENGINE ON TWO 2″x 4″s, GIVE IT A CARDBOARD FUEL TANK & A PAPER BODY. TELL YOU IT GETS 200 MPG@ 200 MPH. PLUS ITS INDESTRUCTIBLE.. AND 100% SAFE. THAT’S WHY WE GOVERNMENT OVERSITE OT ALL ASPECTS OF THE AUTO INDUSTRIES.

  4. James Barry says:

    Ethanol has proved to be one of the biggest boondogels of recent times at great cost to motorists. We need to get rid of it now!!!

  5. Ted Hoelter says:

    Before supporting this proposal one should ask which group is most likely able to assess what car buyers really want. Would that be the automakers who compete against each other for our business and for whom knowing what buyers want is one of the most important things they need to get right? Or would it be a government official (or consumer “advocate”) who has no real stake in being right or wrong about what car buyers want?

    One should also ask which group would be most likely to have ulterior motives. The motive of the car makers is profit generation, which is best done by giving consumers what they want. The motives of government officials are almost always in alignment with the agenda of the political party affiliation of the chief executive. While advocates like CR’s Shannon Baker-Branstetter could easily have as their true motive for tighter fuel economy standards, their concern about global warming and the environment. (It’s hard to not suspect ulterior motives when there are so many excellent choices for fuel efficient vehicles right now.) The ideas that Baker-Branstetter proposes that automakers limit choices (“Automakers largely shape the vehicle choices for consumers”) and that consumers lack the ability to make the financial calculations required to determine which vehicle will have lower lifetime ownership costs is insulting on multiple levels. It insults our basic intelligence to suggest that government regulation increases consumer choice. Other than monopoly situations, most government regulation has the opposite effect on consumer choice. As for consumers ability to assess lifetime ownership costs, you don’t need to be an accountant or engineer to log onto one of the many web sites that calculates lifetime ownership costs for you.

    Finally, this statement by Baker-Branstetter highlights the distorted perspective that develops when advocates spend too much time in a bubble of like-minded thought: “But automakers’ role is to maximize profit, not provide the best overall value to consumers.” Apparently she has never spent significant time working for a company that has as its goal, generating a profit. I have. The entire effort from product conception through development, and on to sales and support is about providing the best possible total value to the customer. That is how businesses make a profit. Delivering the best overall value to the consumer isn’t a concept at odds with profitability. It is the recipe to profitability. This is such a basic concept, that for her to have it BACKWARDS and believe it enough to put it into writing is very telling of how intellectually compromised CR has become.

    • Rick Coleman says:

      Thank you Ted…..you are 100% correct. What happened to Consumer Reports? It used to provide us, but now it tries to push an agenda. Thank goodness there are other sources for consumers to go for facts.

    • Donald Neilson says:

      Shannon Baker-Branstetter’s failure to recognize the fundamentals of the world of business is appalling! It is also indicative of the path that has developed at Consumers Union. A path that apparently believes it is proper to dictate consumer choice. A path I vehemently reject. Accordingly, recent reminders to renew my subscription will go unanswered.

  6. Jonathan K Skean says:

    “80% of all Americans want higher fuel efficiency in their next vehicle”
    That’s what they say, but that’s not what they do. CU seems to ignore this important reality. The vast majority of US vehicle buyers ignore available fuel efficient options and prefer larger, more powerful vehicles that are considered excessive in other markets. True, car makers take advantage of the situation, but they didn’t create it.
    It annoys me that CU won’t acknowledge this obvious reality.

  7. Rick Coleman says:

    I was a loyal CR member for years, I quit because I was tired of CR’s left slant big brother/big government views on regulating manufacturers. We, the consumers, can regulate the products that come to market.

    I was hoping things had changed with CR so I signed up this year, but now I will cancel my subscription. All I wanted was unbaised reviews on products. Sadly, the mission here has gone from being a fact finding source of consumer goods to a union trying to persuade consumers to sign petitions. Good luck CR, contact me if you decide to return to independent testing of consumer products.

    Fyi, owned Hyundai Sonata Hybrid in 2012, lemon lawed it because electrical issues. Replaced with a gas model of identical make. Gas mileage is the same. Keep government out of our business,

  8. Bob M. says:

    Forget 2012 and its fuel economy promises. Zero point energy is now a reality which the Illuminati and its minions are fighting to keep away from the rest of humanity. Zero point = FREE energy for all.

    Many have died for this cause. Far more will perish if we fail to stop the evil forcds from controlling the Earth.

  9. David Kilpatrick says:

    I do not want the government setting any of these standards. If people want to save money on fuel then they should select a vehicle that suits that purpose. Let the market decide, not some unelected bureaucrat in Washington or some member of the political elite either, for that matter.

    • Shannon Baker-Branstetter says:

      Automakers largely shape the vehicle choices for consumers, and if consumers had perfect information and plenty of time to research every aspect of every product, then it would make sense to leave such decisions to automakers. But automakers’ role is to maximize profit, not provide the best overall value to consumers.

      Fuel economy and safety regulations keep the market moving forward so that consumers have lower operating costs and safer vehicles as the fleet turns over. The fuel economy standards are flexible and actually enhance consumer choice by expanding fuel efficient options across vehicle classes. Existing fuel economy standards have already incentivized manufacturers to bring more fuel-efficient trucks and SUVs to market so that people who need a bigger vehicle don’t have to waste money on gas. For example, the more efficient version of the F-150 makes up 60% of the sales for that model.

  10. Tracey Lee says:

    Yes the government controls everything and will do what they decide to do, but, some of you that are just being unpleasant to consumer reports need to remember who they are, what they are and f you don’t like what subjects they choose to debate then don’t read it.

  11. Sophronia Hyde says:

    This is the salient fact: “The single, largest effect on that cost is the forced addition of ethanol to the gasoline pool. In the beginning, when cars were carburerated and especially at high altitudes like Denver, Salt Lake City, oxygen in the form of Ethanol was added to lean-out the carburerator and reduce CO. Today it is not done for environmental reasons since cars are injected and have oxygen sensors to boot. It is purely political. So why not increase the effective miles per gallon by removing it? Tell the Federal government if they want to subsidize corn do it, but not at the expense of the motoring public. Gas mileage would immediately jump, no waiting 13 years for the fleet to turnover.” In addition, wasting scarce agricultural resources by growing plants to add to gasoline is taking an unnecessary additional toll on the environment. It is a wasteful pork-barrel program all the way around!

  12. Curtis Crowe says:

    To meet the fuel efficiency standards the auto industry would have to sell us small unsafe cars that most people don’t want. The last thing we need in government dictating what type car we must drive. We have far too much government control of our lives already. I am sick of Consumers Report promoting more government regulation and will not be renewing my subscription, when it expires.

  13. Jim McCoy says:

    You have missed the point and in doing so are misleading your readers. A holistic point of view would look at the gallons of fuel at a particular cost that it takes to get from point A to point B. The single, largest effect on that cost is the forced addition of ethanol to the gasoline pool. In the beginning, when cars were carburerated and especially at high altitudes like Denver, Salt Lake City, oxygen in the form of Ethanol was added to lean-out the carburerator and reduce CO. Today it is not done for environmental reasons since cars are injected and have oxygen sensors to boot. It is purely political. So why not increase the effective miles per gallon by removing it? Tell the Federal government if they want to subsidize corn do it, but not at the expense of the motoring public. Gas mileage would immediately jump, no waiting 13 years for the fleet to turnover. If you want to do your readers a service you should stick to the facts and fundamentals and not just pick and choose convenient battles that make for sensational news snippets.

  14. Doug Wilmoth says:

    I don’t know enough about this to comment. Does standard require hybrid only? Will a large family vehicle be possible? Where do trucks fit into this? pickup trucks? We cannot harm our competitiveness to distribute and provide goods economically, i.e large loads to maximize product carried per gallon of fuel used.

    • Shannon Baker-Branstetter says:

      Automakers can meet the standards primarily through advancements to traditional gasoline engines, with limited deployment of newer hybrid, all-electric or plug-in electric engines. Here’s more info about the technologies that are being deployed: http://consumersunion.org/research/new-report-finds-automakers-are-on-track-to-meet-higher-fuel-economy-targets/

      And the standards vary depending on the size of the vehicle. Light-duty trucks and SUVs have much easier targets than do smaller cars, but all vehicle categories are expected to improve. For example, a 7 passenger van might go from 19 to 25 mpg while a sedan might improve from 35 to 45 mpg.

      • David Kilpatrick says:

        I agree that automakers can meet the standard by producing hybrids and all electric vehicles but that does not reduce the cost to the consumer unless the government subsidizes the purchase as they currently do or unless the government puts electric car charging stations on city streets at taxpayer expense as they currently do. Where people get the idea that there is a free lunch is a mystery to me.

  15. Donald Dampf says:

    Is a fuel chemistry changed also required to meet the new standards?

  16. James Clark says:

    This is bull crap. Tell our lawmakers to stop trying to control everything in our lives and every thing we buy. You liberals-communists shut the hell up!
    Jim Clark

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