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May 19th, 2009

Weighing the Costs of Obama’s Fuel Plan

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Buying a new car is now going to cost you extra — $1,300 extra by 2016. President Obama announced new fuel and emission standards today in Washington. According to the president, the new standards are expected to lower our dependence on foreign oil, increase fuel efficiency, and reduce the amount of harmful emissions caused by automobiles. He also said the standards are a win-win for both states and automakers:

Obama said the proposal would save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years, akin to removing 177 million cars from the roads over the next 6 1/2 years.

In that period, he said, the savings in oil burned to fuel American cars, trucks and buses would amount to last year’s combined U.S. imports from Saudi Arabia, Venezuela, Libya and Nigeria.

Obama’s plan gives states the higher standard for emissions they requested but also sets a single national standard, sought by automakers, and more time for automakers to make the changes.

What about that extra $1,300? How will the extra costs impact auto sales and thus the economy as a whole?

“Consumers pay less for fuel, which means less money going overseas and more money to save or spend here at home. The economy as a whole runs more efficiently by using less oil and producing less pollution,” [the president] said. “And companies like those here today have new incentives to create the technologies and the jobs that will provide smarter ways to power our vehicles.”

Consumers were already going to pay an extra $700 for mileage standards that had been approved previously, according to administration officials. The Obama plan adds another $600 to the price of a vehicle, bringing the total cost to $1,300 by 2016.

READERS: Are the president’s new fuel and emission standards worth their price tag?

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3 Responses to “Weighing the Costs of Obama’s Fuel Plan”

  1. More on the Efficiency Standards | FUTURISM NOW Says: May 20th, 2009 at 2:34 am

    [...] Weighing the Costs of Obama’s Fuel Plan (hsh.com) [...]

  2. Lucia Says: May 20th, 2009 at 3:44 pm

    Is it worth the extra cost, which is not adjusted for inflation, to squeeze ourselves into a tin can and risk our family’s lives on the freeway while semi-trucks race towards us at 55-70 mph? The option for lighter smaller gas sippers has been available for 30 years for the consumer and the consumer has spoken with their wallet. We like comfort and safety, and if the gov’t tries to force Americans to buy vehicles they don’t want, it will backfire. Americans won’t buy them and the gov’ts car program will go under. Personally, we plan to rebuild our 1998 GMC pickup because it’s comfortable, safer, and paid for.

  3. Tim Manni Says: May 20th, 2009 at 4:12 pm

    Hey Lucia,

    Good to hear from you again. Hopefully technology will be able to match the new fuel and emission standards so that safety will never be compromised. But I hear you, cars seem to be getting smaller and smaller, and there’s no defense against those semi’s. I want a car I feel safe in, but at the same time, one that will be as “clean” as possible. Automakers have already been given billions to develop this technology, let’s just hope they don’t waste it.

    A vehicle that’s paid off…ah that’s my dream. Mechanics sure aren’t feeling the effects of this recession huh?

    Nice to hear from you, thanks again,
    Tim

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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