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Guzzler Grade Won't Scare Off Buyers

Published: Tuesday, 31 Aug 2010 | 10:22 AM ET

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By: Phil LeBeau
CNBC Correspondent

Here we go again.

Once again, many in the auto industry are howling about the latest attempt by the government to push the industry toward better fuel economy.

The issue is whether new cars and trucks should come with a "Guzzler Grade" on the new car sticker prices.

The industry says putting an "A", "B", or "C" on a new car sticker would amount to the feds endorsing one particular model over another. Critics say the proposal would scare buyers away from some models that get lower grades.

While the idea is not a perfect one, it's a huge step in the right direction.

For all the information you find on the window stickers of new cars and trucks, the current system often leaves buyers confused. Not only that, I'd venture to guess that most buyers don't buy the mileage estimates on the window. As a friend of mine who recently bought a car said to me, "It says I'll get 24 mpg, but it probably won't get close to that."

That's why the "guzzler grade" makes sense.

It would make buyers truly think about the fuel efficiency of a new model. Will it scare off buyers? I don't buy that. Most people looking for an SUV know they will get far lower gas mileage than if they bought a crossover or sedan. And people will still buy SUVs even if their guzzler grade is a "C".

What this proposal does is similar to what restaurant grades have done in cities across the country. It will force automakers to work even harder to increase the number of models for sale with higher grades, while increasing the fuel efficiency of all the models in its line-up. It is possible people may not want to buy an SUV with a "C-" rating and may opt instead to buy a crossover with a "C+" rating. But if you're an automaker with a strong line-up, you'll still get the buyer.