Will New CAFE Fuel Economy Standards Really Help Car Buyers?

New CAFE Fuel Economy Standards Increase Vehicle Costs but Saves More in Fuel

First off, what is CAFE?

Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy, expressed in miles per gallon (mpg), of a manufacturer’s fleet of passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 lbs. or less, manufactured for sale in the United States, for any given model year. Fuel economy is defined as the average mileage traveled by an automobile per gallon of gasoline (or equivalent amount of other fuel) consumed as measured in accordance with the testing and evaluation protocol set forth by the Environmental Protection Agency (EPA).

As expected, the associated costs are high and someone needs to pay for this to happen. The auto industry says the cost  will be over $50 billion – creating about $240 billion in savings. Retail prices for new cars and trucks will increase. Tough to say how much we’ll save on fuel costs; what if the price of fuel increases too fast – offsetting any planned savings. We could be stuck with simply more expensive new vehicles. Will consumers still seek out low priced used cars?

Initial estimates call for $3000 in fuel cost savings over the life of ownership; I wonder if car shoppers will choose lower initial costs over long term savings.

What do you think of these (potential) savings and changes?