Fuel Economy Based Registration Fee
I've been thinking about how to get people to either give up their cars or to drive smaller cars. This is what I've come up with. To put it simply, the more fuel efficient your vehicle, the cheaper it is to register it annually. Also, to provide incentive to get older cars off the road, after a certain number of years, it starts to cost more to register an older car. Of course, since car registration is a provincial responsibility, you'd have to get the provinces to play ball, but one thing at a time. Here's what I propose: First off, you set a baseline fuel economy. Then you base the amount of registration on what a particular car's estimated combined fuel economy is in comparison to the baseline. Cars below the baseline get a break, those above get penalized. I propose setting the baseline at 7 L/100km (roughly 33 MPG, using US gallons). This is below the average efficiency of 12.05 listed in the EPA's 2007 fuel economy data and a good target to aim for. I also propose setting the renewal fee at $100 for a 7 L/100km, at least here in Alberta where the fee is currently around $60. So with this base information, the formula for working out what a particular vehicle's renewal fee would be:
With the combined economy being 7 L/100km or greater:
Where F equals the vehicle's fuel economy in L/100km.
For vehicles with fuel economy better than 7 L/100km (smaller number), the formula looks like this:
Again where F equals the vehicle's fuel economy in L/100km.
For vehicles over 10 years old, a 1 cent per km driven during the year times the number of years past 10 years excise tax is added to the registration fee. So for example, if an 11 year old car was driven 10000km in a year, there would be an additional $100 on the registration, a 12 year old car driven the same amount would cost $200. This would provide an incentive to get older cars off the road, while still allowing people a chance to drive classic cars on a limited basis.
So how would this look? Lets take 5 cars and see what the registration would be. For our examples we'll take a 2007 Dodge Durango 2WD with a fuel efficiency of 21.38 L/100km; a 2007 Honda Civic 4 door with automatic transmission, fuel efficiency 7.35 L/100km; a 2007 Toyota Prius (hybrid), fuel efficiency 4.28 L/100km; a 1991 Honda Civic 4 door (the current Evilmobile), fuel efficiency 6.72L/100km; and a 1989 Ford Taurus, fuel efficiency 10.69 L/100km. For our two older cars, we will assume that they drive approximately 20000 km every year.
| Vehicle | Efficiency (L/100km) | Registration Cost | Age surtax | Total Registration |
| 2007 Dodge Durango | 21.83 | $1538.31 | $0.00 | $1538.31 |
| 2007 Honda Civic | 7.75 | $135.05 | $0.00 | $135.05 |
| 2007 Toyota Prius | 4.28 | $61.09 | $0.00 | $61.09 |
| 1991 Honda Civic | 6.72 | $96.00 | $1200.00 | $1296.00 |
| 1989 Ford Taurus | 10.69 | $469.00 | $1600.00 | $$2096.00 |
Now I know that both the '91 Civic and '89 Taurus aren't getting near the fuel efficiency they got when they were new, but that is taken into account by the age surtax, both of which are over $1000. This is a huge incentive to either a) drive less, as that would give a smaller surtax or b) get a new car. The incentive also helps move people towards more fuel efficient vehicles, the large pick-up truck being over 10 times more expensive to register than the more fuel efficient Civic and 25 times more expensive than the hybrid Prius. Over time, people will begin to opt for more efficient cars and trucks to save on total cost of ownership. This becomes especially true with older cars.
The advantage of this approach is that it provides an incentive that won't destroy the economy. The auto manufacturers will still make cars, the market will simply force them into making more efficient ones. People will still buy the car they can afford, it's just more of us will buy more efficient ones since they are cheaper to own. All this and I haven't even looked at increasing the gasoline tax, which would provide an even greater disincentive to inefficient vehicles.