Bernie Moreno on Making Cars Affordable Again

In this special edition of Inside Automotive, Senator Bernie Moreno, a former car dealer, outlines the Trump administration’s “freedom means affordable cars” proposal and what it could mean for consumers, dealers, and manufacturers. Moreno explains how proposed changes to EV mandates, CAFÉ standards, and federal incentives are intended to lower vehicle prices and restore consumer choice in the showroom. He also discusses how unified national emissions rules could reduce regulatory complexity for automakers and dealerships alike. The conversation explores affordability challenges facing today’s buyers, the impact of trade and tariff policies on domestic production, and why Moreno believes pent-up demand will drive a strong sales rebound in the coming years.

Senator Bernie Moreno covers:

• Eliminating EV mandates and resetting CAFÉ standards
• How regulatory costs influence vehicle affordability
• The role of consumer choice in vehicle purchasing decisions
• Interest deductions on auto loans and their impact on demand
• Trade policy, tariffs, and incentives for U.S.-assembled vehicles
• Why Moreno forecasts a 17 million SAAR in 2026

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Chapters

• 0:11 Proposal Revealed And Why It Matters
• 0:47 One Federal Standard Replaces Patchwork Rules
• 1:36 Resetting CAFE And Ending EV Mandates
• 2:43 Affordability, U.S. Production, And Price Trends
• 3:16 Hidden Alcohol-Detection Requirement Exposed
• 4:20 Why U.S. Cars Cost More Than Japan’s
• 5:10 Aging Fleet And The $20K Car Gap
• 5:34 Tariffs, Trade Certainty, And Local Jobs
• 7:37 2026 Outlook: Rates, Wages, And A 17M SAAR

Transcript

Jim Fitzpatrick: 0:11

Hey everyone, Jim Fitzpatrick. Welcome into what I think is a special edition of Inside Automotive right here at the CBT Automotive Network. Last week, the Trump administration, the U.S. Department of Transportation, unveiled a freedom means affordable cars proposal. Joining us today is U.S. Senator and former car dealer, Senator Bernie Marino. He's here to break down what the proposal means for dealers, manufacturers, and consumers nationwide. So, Senator Marino, thank you so much for taking the time out of your very busy schedule there fighting the good fight for everyone, including automobile dealers in uh in DC. So thanks for joining us. Oh, of course, honored to be here. Sure. So, what's the talk to us about this proposal, what's included, and why it's important.

SPEAKER_02: 0:53

Look, uh Jim, what we've basically done is we've unleashed the marketplace. Uh, we've stopped strangling car companies and basically trying to coerce customers into buying cars they didn't want. Uh, the government should play no role in the showroom. When a client walks into a showroom to buy an automobile, uh, a politician should not be on their shoulder directing them on what car to buy, what car not to buy. So it started with, by the way, uh taking away California's ability to set a different emission standard than the rest of the country. That happened, that was a big deal. So for the first time in my lifetime, Jim, we now have one federal standard for the entire country, which is huge. It really is. It really is, no question about it. Yeah, number two, we got rid of these cafe fines. So companies like Stellantis and uh Ford and others aren't paying hundreds of millions of dollars uh for meeting standards that they couldn't achieve. What we did last week with the president was now reset those cafe standards to be reasonable. The way Biden had it set up, Jim, basically no car company could have hit cafe requirements without making only electric cars. So that made no sense because what was happening was they would sell electric vehicles, everybody lost money on it, and of course they had to raise the prices of cars that people did want to buy. So, as Jim Farley said shortly after the announcement, you're gonna see the price of automobiles drop uh significantly because of the changes that we've made. And we got rid of the EV subsidies, we got rid of the EV mandate. Uh, we had my bill uh pass as law, which allows you to deduct the interest on loans from your taxes.

Jim Fitzpatrick: 2:33

Huge deal. That's right, that's right. Yeah, there's some major wins for uh all Americans, but specifically uh the retail automotive industry and and of course the OEMs as well. I mean, these things are are they mean a lot. The proposal emphasizes affordability. I know that's a a very uh that's a key word today in DC, specifically with the president. In your view, what will it actually take to make cars affordable again?

SPEAKER_02: 2:59

Well, we the things that we've done are doing exactly that. Like if you look at comparing car prices of individual models this year versus last year, car prices are actually down, and we're making more of the cars that we sell here in America in America, which is a huge win for obviously our economy. Now, what we're doing is on January 14th, we're gonna have a hearing, we're bringing in all the car company executives, and we're gonna talk to them about what are the things that we can do at the federal level to get some of these crazy regulations out of the way that have driven up car prices. I'll give you an example, Jim. And you're knee-deep, actually head deep in a car business. I I I would get bet you don't know this is actually the case. In in 2022, in the infrastructure law, they passed a hidden provision in there that forced all cars made in 2026, so right now, to have a procurement detection device. So when you leave your studio and you go start your car, you have to breathe uh into your steering wheel, touch a device that checks your blood alcohol content, and if it thinks you're drunk, it won't start the car. Oh my god. That's the law of the land today. Wow. Now the government hasn't forced that because, of course, the technology doesn't exist, and the ones that do allow it to happen are so expensive. So those are the types of insane regulations. Yeah, that's crazy. That's in the law. That's that's not a bill that's proposed. That's the law of the land today. That is incredible.

Jim Fitzpatrick: 4:23

I mean, and and the average consumer doesn't know that. OEMs are you know freaking out over these types of regulations and restrictions in building these cars? And and uh it's interesting the fact that, you know, the the president even mentioned um you know that that Japan is able to build these great little cars for a lot less money, and and how come we're not able to build them over here? Well, it's reasons like this, right?

SPEAKER_02: 4:45

Yeah, exactly. You have uh emission standards that are unreasonable, safety standards that are uh not necessary. Look, at the end of the day, people will buy the car that's best for them. But look what the big thing we gotta do, Jim, we gotta make cars affordable. Yeah, if a working class American can't afford an automobile, it's not just a, oh, it's a nice to have. That's how I get to work. And by the way, that's why people are keeping their cars so long. The average age car is now over 14 years old. Yeah, we gotta bring the fleet age to be much younger. Six, seven, eight years is probably the right average uh to have. That means we have to make newer cars more affordable. And if we do that, guess what? They're safer, they're better for the environment. Those are the things that we have to focus on. But that elusive$20,000-ish dollar car, other than a Honda Civic, doesn't really exist in this country.

Jim Fitzpatrick: 5:32

That's right, that's right. And that and that's a shame. Um, hey, let me uh switch gears a little bit with you. Um when I uh interviewed you uh earlier this year, we were talking about the tariff situation at the time. Um you said, hey, you know, tariffs is is this whole issue is kind of a blip on the radar a year from now. We probably won't even be discussing it. Where do you stand on that? You know, tariffs are still out there and and front and center with a lot of people, and uh certainly OEMs and dealers are concerned about getting back to affordability. Where does the what's your take on where we are right now with tariffs?

SPEAKER_02: 6:04

I think we're in a great place. I think what we've done in the auto industry with tariffs has worked out really well. Uh, we have certainty now. I think these tariffs are institutionalized for the car companies. Uh, we've given them a 3.75% of MSRP offset for the cars that are final assembled in the U.S. We have trade deals with the UK, with Europe, with Korea, with Japan that have uh built in the certainty. I think the car companies obviously nobody wants to pay the tariff, but it has not translated into higher car prices. Uh that's again just a fact. You look at individual model pricing. Uh there are some still uh car companies that have to solve uh a China issue. Uh GM, a couple of Bjork models are made in China. Let's move these things back to the US. Uh there's some cars made in South Korea that maybe need to be made here in America. But ultimately, that's something that we should all uh root for. Look, if you're in the auto business, you want customers. And how do you get customers? You have to have good high-paying jobs. And these auto jobs are good, high-paying jobs. You got companies like Ford, like Toyota, like Honda, like Tesla, that virtually all their automobiles are made in the US. That's good, that's a good thing. Right. It's not a bad thing. And I think terrace, for the most part, is not really the topic of conversation uh much around the auto industry as we predicted. And by the way, we had a 16 million SAR, which is what I predicted back in March. The analysts from uh all these uh uh uh Harvard MBA groups were saying that the SAR was gonna be 12 or 13 million. Can you imagine getting paid that much money and being that wrong?

Jim Fitzpatrick: 7:36

That's a good point. Speaking of which, here we are in in uh December of 2025. What is your take on the year ahead in 2026? What do you and specific to the auto industry, what kind of a year do you think we'll have? Uh, do you think we'll ever get back to that 17 million SAR that the industry has chased for so long? Uh, disputable on whether or not we should be doing that, because I think dealers are making more money on less cars today than they were when we were trying to live up to this 17.5 million vehicles, and you know, it was a race to the bottom on gross profit. But what's your take on on the overall landscape moving into 2026?

SPEAKER_02: 8:13

Yeah, I'd be I'm very bullish. I think we actually can hit 17 million in 26. I'm gonna tell you why. Okay. Uh cars are just really old, Jim. People are driving 12, 13, 14, 15, 16-year-old cars. Yeah. Uh they they uh can trade into new UR cars, and those people who are driving four or five-year-old cars can move into uh a brand new automobile. So I think that's uh something that we're gonna see next year, especially as we drive this affordability message. We now have interest deduction for car loans for American-made automobiles. I want to introduce a bill to allow interest deduction for leases. I think that will unlock another group of consumers. Uh uh plus the no tax on tips, no tax on overtime, the child tax credit, those things in the one big beautiful bill don't kick in until 26. So you're gonna see real wages growing. I think you're also gonna see a Federal Reserve that's not run by an idiot like Jerome Powell. So I think you're gonna see a lower interest rates. So I think as you see lower interest rates, that will also unleash a boom. So I am gonna predict right here in December of 2025, that will hit a 17 million star in 26.

Jim Fitzpatrick: 9:18

There you go, from your lips to God's ears. So uh I'm sure there's a lot of dealers out there that'll be very happy to hear that, as well as OEM executives, I'm sure. So, Senator Bernie Marino, thank you so much for joining us on the show. Very much appreciated. I know you're one busy guy up there, and as I said earlier, fighting the good fight for dealers and Americans up there doing doing the right thing. So, we're very much appreciated.

SPEAKER_02: 9:39

Well, thank you, Jim. I appreciate it. Thanks. Thank you.

SPEAKER_00: 9:42

Thanks for watching Inside Automotive with Jim Fitzpatrick.