In 2022, the average age of a vehicle on the road in the US exceeded 12 years, a record. The growing age of American cars is a long-standing trend: the average age of running cars in the US it has grown about 45% since 1995, gaining momentum in the last five years due to a constellation of changes within the auto industry ranging from declining inventory to rising prices of new and used vehicles.
The general compiled data from official government and various private sources to understand how the age of vehicles operating on US roads has changed. Sources include the Bureau of Transportation Statistics, IHS Markit, Office of Economic Analysis, Organization for Economic Cooperation and Developmentand the Bureau of Labor Statistics.
Industry analysts and the dealerships that service many of our cars and SUVs credit technical advances for our longest-lasting relationships with vehicles. Suspensions are stronger today, while engines are more fuel efficient and can last longer than ever: getting 200,000 miles on your odometer without major issues is no longer unheard of. But new vehicles have also risen in price, as manufacturers have produced fewer model years since 2017.
In 2018, the auto industry saw a shift from a US market saturated with new vehicles. Car sales had plummeted due to the Great Recession, but Americans coming out of it took advantage of the low interest rates set by the Federal Reserve to get loans. New car sales, in turn, skyrocketed.
The owner of an older vehicle may incur more maintenance costs as the vehicle accumulates miles on the odometer. But eventually, the car loan is paid off, and maintenance, insurance, and fuel become the major costs of vehicle ownership. Since a car generally loses value as it ages, an older vehicle also tends to be cheaper to insure than a new car. These factors can make sticking with an older vehicle that has paid off, rather than trading it in for a new ride, a solid proposition these days for everyday commuting.
The nosedive in vehicle affordability since the start of the pandemic threatens to add yet another factor in extending vehicle ownership. The biggest increases in recent history for the cost of new and used vehicles began in 2021 as computer chip shortages and supply chain issues hit manufacturers already hit hard by disruptions. of COVID-19. Rising demand and reduced supply pushed prices to levels that were unaffordable for many prospective buyers.
Popular mainstream vehicles like the Toyota RAV4 and Honda CR-V, which were affordable in 2019, are now out of reach for the average consumer, according to a recent analysis by the used car search engine. iSeeCars.
He average monthly car payment for a new vehicle it hit an all-time high of $648 earlier this year, according to Edmunds. While a five-year auto loan used to be common, consumers often sign six- and seven-year notes for new vehicles. Read on to learn more about how the length of car ownership has changed in the US in recent decades.
QUALITY AUTO INSURANCE COVERAGE AND AFFORDABLE RATES
The General includes a variety of Car insurance coverage options, including liability, collision, comprehensive, and comprehensive coverage.
The cars are now usually on the road for more than 12 years.
The average age of vehicles on US roads has increased at the fastest rate recorded during the early 21st century. It has maintained a steady upward trend through the 2010s. The surge in average vehicle ownership is largely attributed to the 2008 financial crisis and the Great Recession that followed, when many American consumers held on to what they had and delayed major purchases.
MINIMUM LIABILITY INSURANCE REQUIRED
Most states require a minimum of auto liability insurance coverage. Get hassle-free, no-obligation service liability insurance quote in 2 minutes online.
The price of new cars has increased by more than 17% since 2020
As the average age of vehicles on American roads has steadily increased over the past five years, car prices have skyrocketed in the past 24 months.
When the COVID-19 pandemic began, many US auto dealerships were shut down as nervous customers stayed away, and social distancing guidelines forced many to close temporarily, even as their maintenance shops stayed open. as essential businesses. Sales teams at dealerships without robust online purchasing and delivery systems quickly sped up streamlining socially distant online purchasing and delivery processes similar to those of their emerging competitors like Carvana.
The line chart showing cars available for sale was rapidly declining even before the pandemic.
Consumers have noticed a dwindling selection of new vehicles to choose from on dealer lots as inventory stock has plummeted since the year 2000. Manufacturers saw a drop in inventory after the onset of the Great Recession , but they had steadily replenished inventories from the mid-2010s until earlier. recession levels.
Domestic Auto inventories are at their lowest point. since data collection began in 1993. Demand for new vehicles fell after 2018 but spiked again in 2021 just as automakers struggled to deliver new units to dealers.
GET CHEAP AUTO INSURANCE QUOTES FAST
Get a free and secure service auto insurance quote online in minutes. No hassles, no compromises.
Line chart showing that new passenger car registrations are also on a downward trend.
The new vehicles on the road are a boon for the auto service industry, which wins a larger market of potential customers with each new Toyota Corolla and Ford Bronco. Inventory crises on dealer lots that began in 2021 have given way to higher prices, fewer new vehicle sales and fewer passenger cars registered in each state.
Written by: Dom Di Furio
Leave a Reply