New Fuel Economy Standards: How Will They Affect You?
The Obama Administration recently announced the next phase in the government’s efforts to increase fuel economy and reduce greenhouse gas emissions for new cars and trucks sold in the United States. Covering model years 2017-2025, the new Corporate Average Fuel Economy (CAFE) standards will require automakers to reach an average of 54.5 mpg for all new cars and trucks in their fleet combined by 2025.
How Will the New CAFE Standards Affect Car Buyers?
Car Buyers will see more fuel-efficient vehicles than ever before in manufacturer’s lineups with many more choices in various segments than previously offered. Consumers will see more manufacturers offering hybrids and electric vehicles that will compete with the popular Toyota Prius, and with well-received newcomers, Nissan Leaf and Chevrolet Volt, as well as more fuel-efficient SUV’s and sports cars. Manufacturers will have to trim the fat and become more fuel-efficient in every vehicle segment to meet the government’s new fuel economy standards while still appeasing car buyers.
“The pressure’s on for manufacturers to increase the fuel-efficiency of all their vehicles while maintaining the wide breadth of vehicle choices that American consumers demand,” said Jesse Toprak, VP of Industry Trends and Insights at TrueCar.com. “Automakers are going to have to get very creative to continuously improve fuel-economy, and conform to the standards, while still making cars people want to buy and remain competitive.”
“Manufacturers will have to spend additional resources to create even more fuel efficient vehicles in the coming years, and they will have no choice but to pass on at least some of these higher costs to the buyers. However, vehicles with better gas mileage should more than offset the higher prices in the form of lower ownership costs,” said Toprak.
Understanding CAFE Standards
Congress enacted CAFE standards in the United States in 1975 to improve the average fuel economy of cars and trucks in reaction to the 1973 Arab Oil Embargo. While the mathematics behind it are complicated the curious and mathematically savvy can check out the National Highway Traffic Safety Administration (NHTSA), which explains the computation here.
TrueCar’s Version of CAFE Standards – TrueMPG
TrueCar knows that CAFE ratings are not easy to understand and are certainly not consumer-friendly. Because of this, TrueCar has created a simpler version of the CAFE ratings, called TrueMPGTM.
TrueMPGTM computes monthly average fuel economy by brand, manufacturer, origin and vehicle segments by using actual sales data or forecasted sales data for the current month.Calculations start at the trim level, and take into account EPA fuel economy data including engine size and drivetrain that affect a vehicle’s MPG ratings; the sales share from each trim level is then calculated to create an average for each model. Brand level data is calculated by the sales share of each model and the manufacturer data is then based on the share of each brand, providing an accurate and completely data driven picture of actual measured MPGs in the market place. TrueCar utilizes EPA’s average fuel economy rating using 45 percent highway and 55 percent city driving behavior.
Check out TrueCar's latest TrueMPGTM report here.
Looking to Buy a Fuel-Efficient New Car?
If you’re in the market for a new car with excellent fuel-economy, go to TrueCar.com to make sure you’re also getting an excellent price on the vehicle. TrueCar.com shows you what other people actually paid for a new car in your local area in the last 30 days, then gets you an even better price from a local TrueCar Certified Dealer in your area.
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