The average age of road cars in the US is now 12 years, older than ever before
How old is your car?
About a year ago I wrote a similar piece, titled "America's average road car is older than ever before", and here we are, 45 weeks later, as vehicles on the road keep on getting older. According to IHS Markit (the same R&A company that conducted the survey last year, ed.), the average motor vehicle on US roads is now 12.1 years old - it was 11.9 years in 2020.
Photo by Nabeel Syed on Unsplash
The US economy took a big hit in 2008, following a disastrous financial crisis, and then again in 2020 with Covid, which has created yet another 'once-in-a-lifetime' economic catastrophe that's likely to leave an even deeper impact than we think. Furthermore, new cars are getting increasingly more expensive: the average new vehicle is now priced at $38,255 - it was only $25,449 (!!) in 2016.
We also have to remember - and this is not necessarily a bad thing - that customers are now simply more comfortable keeping their vehicle for longer because cars are more reliable. Cars built in the early 2000s are mostly solid and dependable, equipped with reasonably modern engines without excessive use of new and/or untested technology.
Interestingly, while it is true that the average age of vehicles in circulation is going up, the number of new vehicles sold every year has also been increasing for the last 8 years, up 10% since 2013, which would indicate that American motorists are adding new cars to their fleet, rather than replacing their older vehicles.
IHS Markit analysts believe the trend isn't going to stop and in fact the average vehicle age will keep rising, at least in the short term. Todd Campau, associate director of Aftermarket Solutions at IHS, believes that both trends will continue: consumers will keep on buying new cars more than they did before, but they still won't get rid of their old vehicles.
“While work from home policies may continue for some time, there also has been increased reluctance in the use of public transit and ride sharing, and many consumers are opting for road trips instead of air travel for summer vacations,” Campau said. “As a result, vehicle miles traveled (VMT) may not be impacted greatly in the coming years, given the increased personal use to offset everyday commuting".