A recent report released by the National Automobile Dealers Association (NADA) found that if EPA regulations are implemented, we can expect to see 7 million car buyers drop out of the new vehicle market by 2025.  According to the EPA, the new rules concerning the fuel economies of these vehicles will increase the average cost of these passenger cars and small trucks by $3,000.

It is not surprising that this increase in price will force 7 million people to leave the new car market.  Lower income citizens, like college students and small families, will be forced out of the new car purchasing market because they will not be able to find financing for the purchase. Loans have always been determined by personal income, existing debt, and the price of the car. With these higher costs, the NADA expects banks to offer fewer loans. Unable to obtain banks loans, many Americans won’t be able to invest in new vehicles.

Although some say that these more fuel efficient vehicles will help prices at the pump, the point is moot  since many Americans will be unable to obtain these cars.

The Obama administration can try to dictate what automakers produce, but they can’t guarantee that the American people will buy cars for inflated prices, or that banks will provide loans necessary to make these purchases. In fact, with these higher prices we can expect to see Americans steering clear of these new options. At the end of the day, Americans are perfectly capable of deciding themselves what sort of car they want absent government mandates and programs. Drivers who want to buy expensive, fuel efficient cars should, and will, be able to. Likewise, Americans who cannot afford these new cars with a high price tag should not be forced out of the marketplace.