No, Improved Gas Mileage Doesn’t Put Car Ownership Out Of Reach For Low-Income Americans

Image courtesy of beebo wallace

Automakers are currently asking the Trump administration to rescind federal fuel economy standards, claiming that these rules make cars more expensive and put car ownership out of reach for low-income Americans. However, a new report contends that the data doesn’t support this argument.

The report, [PDF] prepared for our colleagues at Consumers Union by Synapse Energy Economics, points out that while pay for low-income workers is stagnating, the price of everything, especially education expenses and gasoline, has risen. The cost of new cars has stayed the same, the cost of used cars has fallen slightly, but low-income consumers tend to spend more on fuel than they spend on the cars themselves.

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Most cars that are sold (about 69%) are used, thanks to the long lives of modern vehicles, which means that it has become cheaper to buy a car and cheaper to own one over the last decade. Low-income Americans tend to buy used cars, and spend a larger percentage of their budget on gas.

Yet while consumers aren’t paying more for cars, Consumers Union estimates that the average household saves $523 per year in fuel costs compared to what we’d be paying if gas prices had stayed the same since 2005, thanks to improving mileage standards.

The savings that come with having a more efficient car would increase even more if gas prices were to increase, yet none of these benefits required the price of cars to go up.