New auto standards
Consumers are looking to use personal loans to fund new cars as auto fleets are changing. President Obama is sending a clear message to the American people by instituting new rules for cars produced in the U.S. The new fleet of cars will be smaller, lighter and more efficient. This is all part of an initiative by the president to transform the auto industry. Part of the changes are requiring a higher mileage and emission standard, beginning in 2012 and to be completed by 2016.
According to the new rules, new cars and trucks must average 35.5 miles per gallon, which is roughly 10 miles more than today’s average car. Non-trucks will have to reach 39 miles per gallon and trucks will have to reach 30. Eric Fedewa, vice president of CSM Worldwide auto consulting firm, stated that “the proposed changes will make pickup trucks so much more expensive that they will be used almost exclusively for work.” He also believes that families will get rid of minivans and SUVs, in exchange for more affordable smaller vehicles with extra folding backseats. He added, “You’ll see a lot more creativity in interior packaging… you’ll get more rows of seats where you traditionally had cargo space.”
Critics of the new auto policies
Some people who use cargo vans and large trucks for their businesses are harshly criticizing the new requirements. Dixie Bishop who runs a plumbing business stated, “Are they going to take my horsepower down? I have to be able to carry old water heaters and toilets. It’s not beneficial for me to haul one heater at a time. We need the power to pull these heavy items.”
Consumers who use personal loans to help fund auto purchases are also worried that their interest fees will be unmanageable due to higher costs on these vehicles. Simon Fairlene, owner of a construction company, stated, “Sure the government can alter the requirements, but I am the one who has to pay more. The only option for me is to use a high-interest credit card with a huge limit to fund the new purchase or take out a personal loan.”
Car companies
Still car companies are following the new rulings. They are already rewiring vehicles so air conditioners and power steering work off of electricity, rather than the engine to save fuel. They are also working on computer-controlled transmissions with six or more gears to add efficiency. The gas-electric hybrid is also gaining more and more popularity and they are one of the only new cars currently being manufactured that meet the 2016 standards.
Automakers know that these changes will cost billions and that added charges will be passed onto consumers to handle. It’s estimated the Obama-approved vehicles will average about $1,300 more than the average car today. Legislators insist that the overall gas savings will make up the difference within three years.
Performance or fuel economy
Automotive analyst David Leiker stated, “The U.S. consumer has consistently chosen performance over fuel economy given the relatively low cost of fuel.” Although this is Leiker’s position, the past has proven that oil prices drive consumer’s decision making when it comes to vehicle purchases. When oil prices were up, hybrids were popular. Now that oil prices are down, sales of hybrids are plummeting. Consumers may scoff at the added price, but they know that the new rulings will force them to make changes. Use of personal loans to fund the new purchases are inevitable as Americans alter their ways of life as a result of the recession.
I drive a minivan and I’m still short on people and cargo space sometimes. Having a small vehicle is fine for driving to and from work, but what about life? Visiting family, going to the lake, or just about anywhere with a family takes more room than small cars and trucks offer.