The past few years have seen Americans scrimping and saving in all kinds of ways, and it’s no surprise that holding off on a new car purchase has been one of them. However, the consequence of that action has been that the average age of a vehicle on U.S. roads in 2011 was 10.8 years, an all-time high.
The three big factors that have collided to cause this increase the age of cars have been the higher level of quality of both new and used cars, the high cost of new cars, and a decline in the number of miles being driven by Americans.
“The old days of vehicles rusting our after four or five years are gone. Cars are so much better made in order to compete in the market,” David Cole, the chairman emeritus of the Center for Automotive Research told The Detroit News.
There has also been a slowing in new car sales in the past few years, with U.S. sales dropping from around 16 million per year in the early 2000s to 12.8 million in 2011. Converse to the decrease auto sales, the average age rose from just 8.4 years old in 1996 to almost 11 years old last year. Most notable in the past few years, according to The Detroit News is the fact that light trucks saw a jump from an average of 10.1 to 10.4 years old from 2010 to 2011; passenger cars rose from 11.0 to 11.1 years old on average in the same time period.
What car buyers there are out there have seen their credit lines shrink and close with the U.S. economy’s contraction, making it hard to purchase a new car. Those with poor credit scores face high interest rates on the loans they can attain. Mark Seng, global aftermarket practice leader at Polk, noted to The Detroit News that “dealer service departments and independent repair facilities, as well as aftermarket parts suppliers, will see increased business opportunity with customers in need of vehicle service,” since it is often less expensive to repair an older car than to buy a new one.
Americans are also driving less, as the price of gas rises. In the first 10 months of 2011, 36 billion fewer miles were driven, a drop of 1.4 percent. With less wear and tear on vehicles, there is less need to replace current ones, no matter their age. That said, there is a new need for automakers to develop vehicles and features that lure drivers away from the secondhand market and back into showrooms.
Source: The Detroit News