Will new fuel economy rules spark a boom in used vehicle reconditioning?
When people like GM Vice Chairman Bob Lutz talk about how new fuel economy regulations are going to add $5-6,000 to the price of new cars and trucks, it's worth examining how they come to those numbers. Obviously there are some cars today that can achieve the 35mpg level without being insanely expensive. Unfortunately those tend to be smaller cars that the vast majority of American new car buyers seem to be unwilling to buy at current fuel prices. For any number of reasons, Americans still prefer vehicles that are larger, heavier and thirstier, in some cases for perfectly legitimate reasons. Unless the cost of operating those vehicles rises dramatically, it seems Americans won't want to make the switch. Of course the cost may jump anyway, although the timing of such a rise is uncertain. As is all too often the case, trying legislate a simplistic solution to a complex problem is likely to lead to unintended consequences. If customers want their bigger vehicles but carmakers are forced either produce unaffordable versions of big rides or smaller vehicles people don't want, something has to give.
In Cuba, where nearly half a century of U.S. trade embargoes have eliminated access to new American cars, people have just learned to keep the cars that existed there in the fifties on the road seemingly indefinitely. During a discussion at the Chicago Auto Show, GM NA President Troy Clarke indicated something similar could also happen here in the coming years. If car-makers are unable to provide the vehicles customers want at a price they can pay, businesses that specialize in reconditioning used vehicles could step in to fill the gap. While this would benefit consumers by providing affordable transportation, it would negate the benefits of higher fuel economy standards by keeping those more efficient vehicles from supplanting older ones in the fleet. Unless car buyers have a real financial incentive to move to smaller vehicles, they will likely just move to the used car market.
Reader Comments (Page 1 of 1)
Karkus 12:03PM (2/07/2008)
My feeling is that the new CAFE rules won't have much impact. 35MPG is the old highway MPG they are referring to (which is about a car with a 32 mpg highway today). Multiple cars can do that, and even more could do it easily with just a little engine and car weight reduction. Heck , if they just keep the car engine HP and weight of new cars constant, the improvements in engine technology will get us there in a few years.
GM is just using scare tactics with their 5000-6000 number, so the can keep selling big poser trucks/SUVS.
However, if the CARB CO2 rules somehow go into effect, then things will have to improve more.
Still, even with CARB, my opinion is that aftermarket mods will probably remain a small niche market. Most people won't go through the trouble.
The people who really NEED big vehicles will have a large choice of used vehicles, due to all those poser SUVs and trucks being sold right now, which will be on the used market in a few years when gas prices go through the roof.
CAFE just helps us soften the blow to our economy when oil spikes for real.
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jpm100 12:11PM (2/07/2008)
People seem to forget that 35 is the fleet average including trucks I believe.
That means 35 mpg isn't good enough for small or medium cars. They have to get better than that to offset trucks and big cars. Mostly trucks.
If trucks are able to get 25 by some miracle. Cars would have to get 40 to 45 depending on the ratio of sales.
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BC 12:56PM (2/07/2008)
Could you please stop repeating this mindless mantra: "Unfortunately those tend to be smaller cars that the vast majority of American new car buyers seem to be unwilling to buy at current fuel prices." Especially at places like Autoblog GREEN!
Despite what Detroit might want you to believe, there are lots people who who ARE spending to spend money on small cars that gets good fuel economy -- why on earth do you think SUVs are going out of style and the market share for the Detroit 3 are shrinking faster than the polar ice cap?
Come on, people aren't stupid. If the big 3 where building nice small cars that are worth spending money on, instead of neglecting the small car segment and giving us crap like the Chevy Aveo, maybe people would take them a little more seriously. Witness the droves of small cars flying off the dealerships at the Japanese & German makes, and for those who thinks that no one buys a "premium" small car, they really should go ask all those hordes of Mini and A3 buyers.
Repeat after me: Build cars that people want to buy, and they will come.
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Peter L 1:08PM (2/07/2008)
Doing that already with my 1990 Miata.
One used engine brought it back to life
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dhofmann 1:08PM (2/07/2008)
The problem is CAFE doesn't directly target what it hopes to reduce--carbon emissions and oil consumption. Instead, it tries to be clever, by attacking automobiles. And automobiles aren't even the only machines that convert oil into CO₂, not by a long shot.
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Golden Boy 1:51PM (2/07/2008)
"In Cuba, where nearly half a century of U.S. trade embargoes have eliminated access to new American cars,"
I swear I thought other countries besides the US made cars.
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Wildgoosechase 11:10PM (2/07/2008)
Considering American's prefernce for large cars, I believe they will hang on to them longer. If California regulates CO2 then I'm sure we will see 1 year leases in other states. Then those cars will be brought into California as "certified used" and not count against CAFE.
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rgseidl 3:47PM (2/07/2008)
The idea that raising CAFE standards will turn the US into a second Cuba, automotively speaking, is nothing short of ridiculous. Sure, there will be some enthousiasts that keep tinkering with 90s and noughties iron - much as there are classic car nuts like Jay Leno today.
The bulk of motorists want a car that's reliable, even if that means buying something a little smaller than they would have liked. Besides, technology will progress by 2020, so the trade-off between size and fuel economy will not be nearly as severe as it appears today.
That said, tightening CAFE will indeed do nothing to boost customer demand for greater fuel economy. It will take high fuel taxes to make the shift permanent, balanced by cuts elsewhere in the system. Unfortunately, the majority of American consumers (= voters) has not yet connected the dots between low prices at the pump (relative to other OECD nations) and half a trillion $$$ of future generations' incomes wasted trying to keep them there. US politicians will not propose higher fuel taxes for fear of losing elections.
Note that the EU does impose high fuel taxes but apparently, they are not yet high enough to push fleet average CO2 emissions to very low levels by themselves. Unfortunately, it takes anonymity between 27 finance ministers to raise the minimum tax rates on gasoline and diesel, one reason the EU is now set to emulate CAFE in all but name. It's sad to see politicians never seem to learn from each others' mistakes.
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Whopper 4:06PM (2/07/2008)
rgseidl, in simple terms, politicians cannot be trusted with gasoline tax money. If, for example, a gasoline tax could only be spent to pay down the national debt I'd buy into it. Think that could ever happen? Give them more money and it will just get blown on pork!
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A.Brien 4:30PM (2/07/2008)
Tuners should sell a good hydrogen boost system for used cars. There is some currently for sale
on internet but it's complete crap. That system works good only if the engine is correctely re-tune
and monitor after the installation of such a system and it's not the case with the different bunch of amateur kits currently offer. Ignition timing, air/fuel/hydrogen ratio, engine temperature
, etc have to be re-tune and monitor constantly for the system to work good. To install such a system you have to change the engine management unit with a programmable one. 10% to 60% gas saving
is possible . Here's a link to one of these kit sellers but they are not ready for car installation
yet, they specialize on big diesel trucks.
http://www.hypowerfuel.com/product_hydro.html
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Throwback 4:44PM (2/07/2008)
In some ways this is already happening. Used car sales have been going up each year for the last 5 or so years. The fact is new cars cost a lot of money. Go to edmunds or some other site and compare similiar models of '08s and '05s, the price difference is huge. This is why all the auto companies now have "certified used" programs, and dealers are doing a big business in used cars. I plan to buy used next time I buy, unless I can afford a Saturn Flexstream.
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rgseidl 5:36PM (2/07/2008)
@ Whopper -
your logic applies to all taxes, not specifically those levied on fuel. If you were consistent, you'd just refuse to pay any taxes at all! Good luck with that.
Note that I advocated balancing any fuel tax hike against cuts elsewhere, so there would in fact be no additional revenue to spend on pork barrel projects. Not that this would keep the pols from racking up yet more national debt...
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Derek 5:54PM (2/07/2008)
First off, a well maintained older vehicle is just as reliable as any new car, if not more (fewer gadgets). If they are reconditioned well with common wear items replaced and other components properly checked they should be able to survive years more of the neglect most drivers pile on their cars which resulted in the car becoming unreliable in the first place.
The only reason I don't see this idea taking off large-scale is because our society has such a throw-away mentality. I simply don't see that many people opening their eyes.
Secondly, the small car market is, well, small. What is the best selling car in the US? It's the Camry, not the Corolla. Best selling vehicle overall? F-150. Why is the mid-size (if you can still call them mid-size anymore) car market the most highly contested in the US? Why has the Accord just joined the ranks of large cars? Sales of full-size SUV's may be down, but smaller SUV's (which are still monsters) are up.
Of course, on the flip side there are very few good small car offerings in the US. It's either stripped down econo model or luxed-up midsize with very few in between.
Personally, give me a car no longer than 180" long, no heavier than 3000#, with a real manual trans and I don't need more than 200hp either. Keep the height under 54" or so as well and give me a real back seat plus a reasonable trunk with good access. This IS all possible to have together. We had it back around 1990. If we just pulled some of the midsize car designs from then back out, gave the design some improved aerodynamics and a modern engine but kept the same basic dimensions, then 35mpg would not be that far off.
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UH2L 10:53PM (2/07/2008)
I've said this before in a prior post... Link to follow.
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UH2L 11:10PM (2/07/2008)
http://www.autobloggreen.com/2007/10/11/video-obamas-new-tv-ad-has-detroit-fuel-efficiency-joke/
I commented...
"...Our government should be providing a level playing field for the Big 3 in terms of trade imbalance, health care costs, currency manipulation. Instead politicians blame the Big 3. People who have worked in the industry know that raising fuel economy to 35 mpg so quickly is not easy and may lead to very expensive vehicles that will force people into used cars..."
Atul
http://www.thingsivenoticed.com
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Mark K 12:48PM (2/08/2008)
I wonder if Cubans would sell us those good old cars back? Maybe we can recycle our plastic cars into new cell phones.
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