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Abstract

In the not-too-distant future, your car could drive itself; technology companies and automobile manufacturers alike are currently developing driverless vehicle technology. While there are many touted benefits to driverless vehicles, perhaps the most important societal benefit is a reduction in automobile accidents. Currently, car crashes are one of the leading causes of death in the United States, and the majority of accidents are caused by human error. Unlike humans, driverless vehicles will not get distracted, significantly decreasing the number of car crash fatalities that happen each year.

In order for driverless vehicles to save lives, driverless vehicles must be on the roads. This means people must be willing and able to buy them. Millennials have demonstrated interest in the technology, keeping in line with their reputation for being early technology adopters, but unfortunately this demographic has limited buying power - a problem when early driverless vehicles could command a premium of up to $10,000.

To bridge the gap between desire and accessibility, the government should enact a driverless vehicle subsidy program. The United States government has, in recent years, implemented two different programs to subsidy individuals’ vehicle purchases - The Energy Improvement and Extension Act and the CARS program. Both programs successfully influenced buyer behavior for vehicle purchases, but the CARS program, which offered consumers a rebate at the time they bought their car, was particularly well-received.

This note proposes a government subsidy for driverless vehicles closely mirrored after the Cash for Clunkers program. By offering a rebate to the consumer at the time of sale, individuals will be better able to afford driverless vehicles, thereby accelerating the overall adoption of this potentially life-saving technology.

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