Economic Impact

The Economic Impact of SUVs “The SUV (Sports Utility Vehicle) is one of the most popular types of vehicle to both own and drive. Last year, SUVs and minivans outsold conventional cars for the first time. However, the SUV is increasingly coming under attack for its fuel economy, emissions standards and safety record. Vehicle fuel efficiency across the US is now at its lowest level since 1980. However, former California governor Gray Davis signed legislation requiring the California Air Resources Board to develop regulations to reduce greenhouse gas emissions from passenger vehicles. This includes SUVs. California accounts for 13 percent of the nation's auto market, so manufacturers of cars, SUVs and trucks are sure to comply with the state's edict, if they cannot get it softened or overturned. This could have enormous economic impact on all of the United States” (Moffatt, 2006) While every one has their own reasons for wanting to purchase a SUV, the five most common reasons are as followed: 1. The pulling capacity and the passenger seating. They have far more towing capacities, allowing owners to tow trailers and boats. 2. Buyers feel SUVs are safer than passenger vehicles. 3. They want the cargo capacity; large cabins, higher ride height. 4. They want a vehicle that gets around better in the snow. 5. They want the offroading capabilities (only 2% of SUV owners actually go offroading) (Wickell, 2007). Even though SUVs are the most popular type of vehicles to own, they have been criticized for many reasons, including their safety, marketing practices, fuel enonomy, pollution record and size. I will cover these issues in the remainder of the paper: 1. What impact does the safety record of SUVs have on the economy? 2. What impact does the lower fuel economy of SUVs have on the economy? 3. What impact does the poor CO2 rating have on the economy? Most SUV owners believe that they are safer in an SUV than in a car.