NHTSA and EPA Fuel Efficiency Test Standards Increases MPG by 20%

Posted & filed under Car Insurance News.

The U.S. Department of Transportation, the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency have banded together, proposing a new program aimed at reducing greenhouse gas emission and fuel consumption. Covering passenger cars, medium-duty passenger vehicles and light-duty trucks for the model years 2012 to 2016, the program calls for a 5% increase in fuel efficiency each year.

The EPA has proposed that the combined fuel efficiency level of these vehicles meet 35.5 mpg by 2016. The NHSTA standards differ slightly, as they are proposing corporate average fuel efficiency (CAFE) standards, which require that fuel efficiency reaches a combined average of 34.1mpg.

Many OEMs (Original Equipment Manufacturers) have voiced their support of the new proposals, as the EPA and NHTSA would be creating a national fuel efficiency standard, but they have also met with some opposition. The National Automobile Dealers Association (NADA) believes that these proposals are burdensome, involving three different agencies that each regulate under different statutes.

If approved, the new standards will be enacted in 2012, becoming increasingly tighter towards 2016. EPA and NHSTA estimate that the new standards will increase the cost of cars that meet these new standards by $1000. However, the average driver will save over $3000 in fuel costs over their new cars lifetime. The increased fuel efficiency will also have positive effects on drivers insurance rates, as many insurance providers are offering discounts for green vehicles and hybrid cars.