Americans Are Keeping Cars On The Road Longer As Vehicle Prices Rise
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The average age of all “in use” passenger vehicles on US roadways increased to 10.5 years in 2017, compared to 9.3 years in 2009 – just after the 2007-’08 financial crisis – and it’s reasonable to suspect that rising prices might have played a role. The average new vehicle loan ballooned to a record $31,455 during Q1 of 2018, according to Experian’s State of the Automotive Finance Market Report, and used vehicle loans also hit a new record high.
The Energy Information Administration, citing data from the US Department of Transportation, recently revealed the growth in average “in use” vehicle age in the United States. Average ages increased across all vehicle segments, although the biggest increase was within the pickup truck category, as the average age swelled from 11.2 years in 2009 to 13.6 years today. The van segment experienced a similarly big increase, from 8.8 to 10.9 years.
Of all vehicle segments, sport utility vehicles tend to be the youngest in the US passenger vehicle fleet, with an average age of 8.5 years. In 2009, the average SUV was just 7.1 years old in the US.
It’s worth noting that, although rising vehicle prices likely had an effect on the average age of “in use” vehicles in the US, higher vehicle ages were found across all levels of personal income. Those with reported income below $25k per year today hold onto their vehicles until they reach an average age of 13 years, and each incrementally higher income bracket results in a younger average vehicle age, up to an 8.9-year-old average for those making $100k or more.
All of this could potentially result in lower future investment in new vehicle programs at General Motors and other global automobile manufacturers, or at the very least, run counter to efforts to reduce CO2 emissions through fuel-saving efforts. In order for cars like the Chevrolet Volt to make a positive impact on tailpipe emissions, a sizable group of buyers must be willing to purchase them.
(Hat-tip: Carscoops)
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Increased Urbanisation, mass transit systems, car sharing, Pedelec (bicycles with power pedal) etc only reinforce this trend towards slower replacement of cars or even not buying a car in the first place. Add the the push for increased car prices by the higher tariffs of the import duty for steel and other disruptions of the global supply chain, and all this might make the total number of automobiles assembled in the USA dwindle. And replacing low wage factories by higher robotized and automated factories in the USA tend to lower the number of workers employed in the auto industry.
The effect of the unintended consequences…
Maybe Mary Barra is the real cute one by reducing the global footprint of GM.
Sounds like wishful thinking on your part.
Not many cars out there are appealing enough to separate me from my hard earned dollars.
As someone always told me you are either paying to have the latest and greatest and safest vehicle with your hard earned money or you will be getting nickeled and dimed holding on to a vehicle for too long.
Maybe the initial stages of a much bigger plan to significantly reduce personal ownership or eliminate it entirely?
There are two kinds of vehicles, the one you want and the one you can afford.
Well said, George!
This is the way it should be, holding onto your car or truck for more then 10 years negates the resale value argument.
If this study was done by brand, GM and Ford would be the longest. My two previous GM cars lasted 26 and 21 years, and my present one, a 2009 Chevy Equinox is almost ten years old, but running like it was new. Now, for the imports, few last over ten years so their fans buy more cars.