Americans holding onto their cars longer than ever
Reluctant to get rid of that “classic” car in your garage?
According to new data from IHS Automotive, you’re not alone.
As the average age of vehicles on the road has climbed to an all-time high of 11 1/2 years—up about one month compared to last year—nearly one out of every four vehicles in the U.S. was built before the year 2000.
It’s the latest data point underscoring a trend that’s been underway since the recession. According to IHS and the U.S. Department of Transportation, drivers on average are holding onto their vehicles for an extra year and a half as compared to 2007, when the average age of a U.S. vehicle was 10 years old.
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“There are people driving these older vehicles, and they continue to hang on to them longer,” said Mark Seng, a practice leader at IHS Automotive.
The recession was a big factor behind the initial shift. With many drivers crunched for cash and their vehicles already paid for, they either didn’t want—or couldn’t afford—to buy a new model. Meanwhile, the quality of cars and trucks built over the last 20 to 25 years has rapidly improved, allowing drivers to wait longer before upgrading.
Prices for new cars and trucks have also steadily increased over the last decade. That’s forced more buyers to take out longer loans, in an effort to keep their monthly payments as low as possible.
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As a result, IHS said the average length of ownership for a new vehicle has been extended even further. On average, buyers hold onto their new vehicle for 6.5 years. That compares to 2006, when new vehicles were held for an average 4.3 years.
Used vehicle buyers are also holding on to their cars and trucks longer, at an average 5.3 years. That’s also more than two years longer than in 2006.
After years of moving higher, however, IHS predicts the trend is close to plateauing. That’s partially because new vehicle sales are closing in on a record high, and are easily outpacing the number of old vehicles being scrapped.
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What’s more, new technology and America’s need to stay connected are persuading more people to trade in their old cars and finally upgrade, Seng said.
“That could drive consumers to perhaps turn the cars over faster than we are seeing right now,” he said.
Questions? Comments? BehindTheWheel@cnbc.com.