As the U.S. economy has bounced back, so have auto sales. But, not necessarily as expected. Because the average age of U.S. cars on the road now exceeds 12 years!! We consider why.
Last month, we looked at parts shortages and the effects on the auto supply chain. But, the changes in the industry are due to other factors, as well.
All-Time Record High: The Average Age of U.S. Cars
Yes, the average age of car on U.S. roads has skyrocketed over the past decade-plus.
The average age of vehicles on U.S. roadways rose to a record 12.1 years last year , as lofty prices and improved quality prompt owners to hold on to their cars longer. It was the first time the average vehicle age rose above 12 years, according to data released by research firm IHS Markit. While the average vehicle age has risen steadily over the last 15 years, the trend accelerated during the coronavirus pandemic partly because of a drop in new-car sales, IHS said.
Whereas 20 years ago a car might have changed hands once or twice and lasted 100,000 miles, it is more common today for a car to have multiple owners and last for 200,000 miles or more, Todd Campau of IHS said. “That has extended the life cycle of the vehicle and created value for more buyers up and down the chain. For that second or third or fourth owner, there’s still meat on the bone.”
The rise in average vehicle age doesn’t necessarily mean Americans forgo new-vehicle purchases and make do with their current cars longer, Mr. Campau said. New-vehicle sales have been running at a record or near-record pace for years, with the exception of a short-lived drop in the early months of the pandemic last year.
Instead, since cutting back in the financial crisis, more consumers have been adding to their number of household vehicles — buying a third car for the family instead of getting by on two, for example, Campau said. The total number of vehicles in operation in the U.S. has risen about 10% since 2013, to around 279 million, according to IHS..