By William Aspray; Barbara M Hayes
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The Clean Air Act, passed in 1970, limited emissions of carbon monoxide and other pollutants from new cars sold, beginning with the 1976 models, and gave enforcement powers to the newly created Environmental Protection Agency. The 1975 Energy Policy and Conservation Act set minimum-gasmileage fleet standards on the automobile manufacturers. In 1978, the federal government imposed a “gas guzzler” tax on cars with high fuel consumption. The technological challenges of building environmentally friendly cars were significant, and the first offerings from Detroit were underpowered, consumed a lot of gas (although fewer pollutants appeared in the emissions), and frequently stalled.
C. 30 As a result of Nader’s attack, Corvair sales dropped 93 percent. Ford had a similar problem in the 1970s, when it was slow to make an inexpensive repair to its Pinto subcompact, which had a propensity for catching fire when hit from the rear. 31 This consumer movement may be one of the most important but neglected factors in changing the information calculus for car buyers because the press was for the first time willing to tell all, thus reducing the information asymmetry that car buyers previously had been subject to.
As car historian James Flink describes the practices of this era: Customers were subjected to the “plain pack” (inflated charges for dealer preparation of the car); the “top pack” (an inflated trade-in allowance added to the price of the new car); the “finance pack” (exorbitant rates of interest on installment sales, usually involving a kickback to the dealer from the finance agency); the “switch” (luring a customer into a salesroom with an advertised bargain, then getting him to accept a worse deal on another car); the “bush” (hiking an initially quoted price during the course of the sale by upping the figures on a conditional sales contract signed by the customer); and the “highball” (reneging on an initially high trade-in offer after the customer committed himself to buying a new car).