It’s no secret that regulations hit the poorest Americans the hardest. Academic research has long demonstrated that environmental regulations impose higher costs on low-income Americans than on the general population.
This phenomenon was most pronounced in the automotive sector, where the average price of a new car was $48,008. The cheapest new car available in 2023 averaged over $20,000. With one-third of American households making less than $50,000 a year and nearly one-quarter making less than $35,000 a year, a new car is out of reach for too many American families.
Of course, the Constitution does not give Americans the right to own new cars. However, some items are expensive. With a mid-range Rolex also costing around $20,000, no one would argue that every working American should be able to purchase a Rolex.
But cars are different for two reasons. First, car ownership is a key element in improving the lives of low-income Americans. For example, studies show that Americans are much more likely to receive welfare benefits if they own a car. Owning a car also improves educational and medical outcomes.
Second, cars are more expensive because of Washington state rules and regulations. One study estimates that the combined cost of regulating vehicle prices is as much as 20%, or more than $6,000 to $7,000 per vehicle. A Heritage Foundation study on the impact of Obama-era fuel efficiency standards found that without these regulations, cars could cost up to $7,100 less. (The Daily Signal is the news and commentary arm of the Heritage Foundation.)
But aren’t regulations necessary to make cars safer?
perhaps. However, regulations alone do not improve safety. And just because some mandate or standard slightly improves safety doesn’t mean it should be mandatory. Consider that in 1913, approximately 33 people died for every 10,000 vehicles on the road. Ten years later, that number had fallen by 63% to about 12 people, and by 1966 it had fallen by more than 83% to 5 people.
1966 is important because it was the year the National Traffic and Motor Vehicle Safety Act was passed, giving a legal basis to much of Washington’s authority to regulate motor vehicle safety.
The question then becomes whether cars have become safer since this law was passed. By 2021, the number of deaths per 10,000 vehicles had fallen to 1.6, but this figure is little improvement compared to the large increases obtained before his 1966 law. . Additionally, it is true that important safety improvements such as seat belts, folding steering columns, and shatter-resistant windshields were mandated after the law went into effect, but these improvements likely meant that consumers would not be able to afford greater safety. It would have been done because of the request. Demonstrate before the act.
Even if regulation is the only reason these important safety improvements were made, it does not justify the endless barrage of regulatory requirements that we continue to see. Backup cameras and tire pressure indicators are useful and provide an added safety element, but should they be required?
And there are always more rules enumerated, such as automatic idle stop, automatic emergency braking, lane change and collision warning, driver monitoring, headlight regulations, and the list goes on.
Safety improvements were often not implemented because automakers devoted limited resources to meeting regulatory requirements rather than developing the safety features consumers most wanted at the most affordable prices. Not considered.
And then there are the outdated tariffs, specifically the so-called chicken tax, which imposes a 25% tariff on certain light trucks available in most countries. This will drive up the price so much that it won’t even be sold in the US.
Despite this, the average price of a car has remained relatively stable over the years, with car prices slightly lagging behind general inflation. In fact, many justify increased regulatory burdens by pointing to the fact that car prices have not increased relative to the economy as a whole.
However, this ignores two very important real-world implications.
In fact, without Washington’s strongholds, cars would be cheaper today and consumers would have a wider choice of products and price points.
After all, this is the normal trajectory for most consumer products. Televisions, personal computers, and microwave ovens are all good examples of what happens when new technology is introduced to the market. These are initially very expensive and relatively low-tech. However, as technology has developed and competition has spurred innovation and lower prices, these items have become more capable and at the same time more affordable to most Americans.
This is exactly what happens in other parts of the world where government regulations on cars are less stringent. Take the wildly popular Toyota Land Cruiser 7, for example. This high-performance SUV is literally selling out in every country it’s sold in, which is no surprise. It has all the features you want in an SUV and costs less than $35,000. However, it is not available in the US because it does not comply with US rules and regulations.
Toyota also offers more budget-friendly pickup trucks and other economical options, such as the Hilux, which can be purchased for around $15,000. Suzuki offers the Jimny for just $15,000. Due to regulations, none of these are available in the United States. This is unreasonable and all Americans should demand better.
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