Compulsory annual roadworthiness tests of older used cars: An economic fallacy

The EU Commission is planning an annual general inspection for cars over ten years old in order to increase road safety. This Policy Impulse analyzes the measure from an economic perspective and shows: The planned regulation hardly achieves any safety-relevant effects, but causes considerable economic damage. A cascade effect makes younger used cars more expensive, which places a particular burden on low-income households. Anticipation effects also shorten the useful life of existing cars - with negative consequences for the climate and resource efficiency. The measure also conflicts with the subsidiarity principle and is likely to primarily serve industrial policy purposes. From an economic perspective, the proposal is highly questionable from a German perspective.