President Obama has announced his plan to raise the fuel efficiency standards for automobiles. He admits that this will add additional costs to new cars. Some estimates predict that higher standards will raise the price of a new car by $1300.

Don’t worry. According to our President Obama, the additional efficiency will pay for the extra costs within three years. That’s great…isn’t it?

Not really. Most people buy cars on credit. The extra cost will actually have additional interest rate costs as well. Car loans are currently around 7%.  If we assume that interest rates will stay the same (a very unlikely assumption given the massive debt Obama has incurred), you will pay an additional $1400 in interest on the additional efficiency costs. For most people, it will take 6 years to pay off the Obama efficiency tax.

It gets worse.

The president has already promised to Cap and Tax energy. He has to stop the seas from rising! Oil refiners are big emitters of green house gases. There is little doubt that Cap and Tax will increase the price of refined products. In otherwords, you may be using less gas…but you might be spending more for gas…and everything that requires energy to build.

When the President is done with his promised “change”, you will be spending more money on a car you don’t want.

There is one flaw in my logic. I failed to mention that the car will be built by a organized labor/government entity. Chances are that your future car won’t start very often. Just think how much you will save then.

You can leave a response, or trackback from your own site.