In 2024, the average age of cars, trucks, and SUVs in the U.S. hit a record high of 12.6 years. This trend signifies that people are holding onto their vehicles longer due to the high cost of new vehicles, the longevity of modern vehicles, or market hesitancy.
Regardless of the reasons behind the trend, this record average can potentially affect the automobile sector and influence customers' purchase decisions. Read this complete article to learn all about the causes and prospects of this new reality.
Increasing Vehicle Age: A Detailed Look
The steep prices of new cars are a major deterrent for potential buyers. Plus, modern vehicles are built to last, contributing to the increased average age. Another driving factor for the high average is that many consumers are waiting to decide between electric, hybrid, or gasoline options.
According to S&P Global Mobility, which tracks state vehicle registration data, the average vehicle age increased by about two months from the previous year's record. However, this growth is decelerating as new vehicle sales recover from pandemic-related shortages, especially in computer chips. Last year, the average vehicle age grew by three months.
Economic Factors
Despite the slow growth in vehicle age, new cars remain expensive. Last month, the average price for a new vehicle was just over $45,000. It is a decrease of more than $2,000 from the peak price in December 2022, yet it is still unaffordable for many.
Todd Campau from S&P Global Mobility stated, "For many households, the cost is just too high, forcing them to keep their current vehicles longer."
Market Trends And Future Predictions
New vehicle sales in the U.S. are gradually returning to pre-pandemic levels:
- Sales Forecast: Campau expects sales to reach around 16 million this year, up from 15.6 million last year and 13.9 million in 2022.
- Market Stabilization: The average vehicle age should stabilize as more new vehicles hit the market, replacing older ones.
- Cost Reduction: The sale of more affordable cars could also lower the average vehicle price.
Due to service demand and maintenance, older vehicles translate to more business for local auto repair shops. About 70% of cars on the road are over six years old and no longer under manufacturer warranties. Those who keep their cars for several years usually stick to regular oil changes and follow the maintenance schedules manufacturers recommend.
While new vehicle sales are gradually recovering, the long-term holding of vehicles benefits auto repair shops and presents unique challenges and opportunities within the automotive market. As the market stabilizes and more affordable options become available, the average vehicle age may again stabilize.
