With almost 300 million vehicles in operation on U.S. roads, the average age of light vehicles rose to a new all-time record of 12.5 years in 2023.
According to a report from S&P Global, this statistic is up by more than three months over 2022 figures, and is actually the sixth straight year of growth in the average U.S. fleet vehicle age. In fact, this continued growth is in line with estimates that the past few years of limited new vehicle sales would contribute to an increased pressure to keep vehicles on the road for longer.
“We expected the confluence of factors impacting the fleet coming out of 2021 would provide further upward pressure on average vehicle age,” S&P Global Mobility associate director of aftermarket solutions Todd Campau was quoted as saying. “But the pressure was amplified in the back half of 2022 as interest rates and inflation began to take their toll. Traditionally, the sweet spot for aftermarket repair was considered six to 11 years of age, but with average age at 12.5 years, the sweet spot for aftermarket repair is growing. There are almost 122 million vehicles in operation over 12 years old. While pressure will remain on average age in 2023, we expect the curve to begin to flatten this year as we look toward returning to historical norms for new vehicle sales in 2024.”
An interesting aspect of an older U.S. fleet is the increased need for repair work, as older vehicles will need more servicing to stay on the road safely. As a result, the aftermarket sector correlates with average vehicle age, and estimated revenues of U.S. light duty aftermarket have grown to $356 billion in 2022, which is up almost nine percent when compared to 2021.
Another notable facet worth mentioning is the breakdown of vehicles. Light truck and light utility vehicles continue to trend towards positive growth, with 78 percent of all new vehicles registered in 2022 belonging to this category. This helped to contribute to the lower volume of passenger vehicles – including sedans, coupes, wagons and hatchbacks – which dropped below 100 million for the first time since 1978.
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Comments
The reason more older vehicles are on the road is because the average family can’t afford a $60k, $70k, $80k truck/ suv. The automakers are forcing people out of the new vehicle market. I for one refuse to pay that kind of money for a vehicle. It’s not responsible money management.
But hey, there are thousands of “foolish” people out there financing these “bloated” vehicles 7, 8 year loans…..absolutely crazy to me…..
Not anymore. Banks are losing big $$$ on repos & with many foolish American consumers now in negative equity on their vehicles due to their willingness to pay over sticker these past 3 years the new car market is going to have a nasty correction with bloated inventories later this year.
I can’t understand why banks lent money to risky borrowers that were paying $5k over MSRP for a Malibu…
Because banks are run by incompetent people that will play risky games with money then cry for a bailout when things go wrong.
Hence why banks must always be on a leash and regulated. Or it’s 2008 & 1929 all over again.
I mostly agree with your comments here, but I wouldn’t have too much confidence in the ability of the ‘regulators’ to provide good regulation that makes sense and safeguards the banks (and therefore the bank customers) from disaster. There were some real dumb regulations that helped lead to the 2008 disaster (as well as dumb banking policy), and now the regulators have decided that it makes sense to charge higher rates to those with high credit scores, and lower rates for those with low credit scores on mortgage loans…gee, I wonder how that is going to work out over the long term?
The Mortgage rate decision is a real head-spinner…
This is the Easiest question on this exam..
85% of Working Americans CAN’T afford a new Chevy.
Dealers near me want $40k for the trashiest Chevy’s on their lot and act like you are lucky they even have crap for you to buy.
95% of Americans will never be able to afford a Buick or low-end Caddy…
$115,000 for an Escalade WITHOUT all the options?
F that all day long!
“ $115,000 for an Escalade WITHOUT all the options?”
Buy the one with the Chevy badge.
And, as a long-time retiree, I certainly can not afford a new Caddy nor a new Chevy. They have priced most of us out of the market.
The cost of vehicles is certainly a big factor here. Also, vehicles simply last longer than they used to. Another possibly overlooked factor is that many of us see that EV’s are going to be pushed harder and harder, and they will likely also make it painful for folks to still own an ICE in a few years with ever increasing regulations and fuel cost increases (just look at all of the lawsuits that are piling up against oil companies accusing them of destroying the planet)…so with all of these factors, why dump the big $$$ on a new vehicle, when you can just keep your old vehicle and save $ in the longer run.
What!!!! You mean smart consumers aren’t willing to pay $80,000 for an overcomplicated, low quality built, expensive to maintain truck or suv?
There’s only so many gullible American fools the automakers can con into that & with banks losing big $$$ on repos the party is over.
There are plenty of well-equipped under $40K vehicles available in the market. Consumers need to learn some restraint when they buy a vehicle. There are numerous features that people get wrapped up in wanting vs needing. No one NEEDS heated/ventilated seats, HUD, heated steering wheel, suede/alcantara anything, massaging seats, ambient lighting, heated rear seats, power folding rear seats, lighted/chilled/heated cupholders, etc. These are all luxury features that automakers have done a really good convincing buyers that they are something they must have. Those are the types of non-critical convenience features contributing to the increase in prices. If people sit back and think about the features they really need, base model and mid-level trims will meet or exceed their requirements at an affordable price.
Perfect example. I have a friend that has no kids, no pets, and uses their car 95% of the time for commuting to work and running errands with their spouse (who is always a passenger; they never drive each others cars) on the weekends. However, any new car they buy needs to have power everything, heated REAR seats, memory seats, AWD, V6, premium wheels, premium paint color, and all available option packages. If it has the optional accessory premium wheels installed, even better. They won’t hesitate to spend $50K-$60K on a vehicle. They never use any of the backseat amenities, yet feel like if they don’t have it they are missing out…because they simply want to be able to tell people their car has it. There is a lot of conspicuous consumption going on with new vehicles these days and the automakers are feeding in to it. Consumers are eating it up.
Just give me some decent colors to choose from, some decent looking wheels, enough on the inside to make me comfortable for getting to work or running errands, and I am good to go. I have lived for decades without heated seats, heated steering wheel, and all that other electrical stuff. As long as the HVAC system puts out heat in the winter (it gets down to single digits here) and cold AC in the summer (we see triple digits a few days each summer) that’s all I need. It doesn’t need to be “automatic”…I can turn a dial from blue to red to adjust temperature. If I need more rear cargo room, I can pull a lever to drop a seat. I’m perfectly happy with cloth seats and actually prefer them to leather/vinyl. There are only two features that I really prefer…a leather wrapped steering wheel and NO piano black interior trim. If the car doesn’t have a leather steering wheel, I can always buy a “wheelskin” and install it myself. Piano black interior trim is a deal breaker. As soon as I open the driver’s door and see a sea of that stuff, I don’t even test drive the car. It’s immediately off my list.
If they have no kids or pets they can afford the premium package.
🙂
With my neuropathy, the heated wheel is a Godsend. But, I generally agree with your comment.
Dave Ramsay says that no one should buy a new truck at their current prices unless they have a million dollars in savings. I have lots and lots of millionaires that live in my town.
Most people use vehicles as a status symbol. Go thru your local trailer park and you will find all kinds of new $60k trucks in there.
It’s always an option to buy smart. I paid 36k (51k MSRP) for a nicely optioned Silverado crew 4wd in 2018 and sold it for 37k in 2021. My 2022 F150 was 44k and has an MSRP of 60k. I could sell it for 45-48k I assume.
Most people just runnl out and buy crap at full price then trade it in with no equity.
Did you buy the F150 new? That sounds like a phenomenal deal. I think the best I have ever done on a new truck was $12.5k off msrp. I wish I could say that I got a substantial discount off of my 24′ GMC 3500, but I didn’t. I do plan to make up for that by keeping it for 10 years or longer. I could have gotten around $7k off on a 23′ GMC 3500, but I would have always kicked myself for that since I really love the upgrades on the 24′.
I always appreciate it when people bring up Dave Ramsey, we have followed much of his advice for years. I think you are right about many folks using a truck as a status symbol. Just looking around my neighborhood, only around 50% of the people who own trucks seem to actually use them for their intended purpose. We have a truck, but we ‘need’ it to tow our trailer, otherwise, they are so expensive at this point, I don’t think I would have dropped the cash on one if it weren’t for our trailer.
People drive the light vehicles (cars, SUVs and small pickups) longer because there are no equivalent replacements produced by the OEMs.
Let’s be honest and say that not every customer will go from a sedan or wagon to an SUV or pickup that is 2000 pounds heavier.
Furthermore, the prices for many new vehicles have been too high for 2 years and customers no longer want that.
Furthermore, the future of the ICE and BEV is still not clear and that also prevents people from buying.
I make a clear distinction here between private buyers and commercial and official customers!
Conclusion 1!
Private individuals have to live and buy the dollar (euro) more sparingly than commercial and official customers.
Unfortunately, this is the world’s No. 1 problem!
Conclusion 2:
And remember if you drive a 2222 pound car you don’t want a 5555 pound car as it’s too heavy, expensive and too big for normal needs like shopping or a little trip out into the country for a picnic…
HAPPY FATHER’S DAY TO EVERYONE, DADDY OR NOT!!!
I have a Chey 2006 Silverado with 69,000 miles on it bought new still in good shape always been taken care of by chey dealer ship will and can not afford new car at those prices I keep riding and driving my Chef love my Truck
My daily driver is a 2012 Silverado, the wife’s is a 2019 Nox, and the backup is a 2009 Pontiac. No immediate plans to replace any of them.
Glad that I can work on vehicles myself. My 2008 Sierra Denali has been very reliable, but it still needs attention every now and then. I’ve seen too many people get screwed on repairs that are very expensive. Women seem to get taken advantage of more so than men. I wouldn’t own an older vehicle if I couldn’t fix it.