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The average American car is older than ever before—here’s why that could keep increasing
In 2022, the average age of a vehicle on the road in the U.S. surpassed 12 years—a record high. The rising age of American cars is a longtime trend—the average age of automobiles in operation in the U.S. has grown by about 45% since 1995—that gained momentum in the last five years due to a constellation of changes within the automotive industry ranging from a decline in inventory to rising prices for new and used vehicles.
Industry analysts and the dealerships servicing many of our cars and SUVs credit technical advancements for our longer relationships with vehicles. Suspensions are more rugged today, while engines are more fuel-efficient and can last longer than ever: Reaching 200,000 miles on your odometer without major issues is no longer unheard of. But new vehicles have also increased in price…
Automobiles are now typically on the road for more than 12 years
The average age of vehicles on U.S. roads increased at the fastest clip recorded during the start of the 21st century. It’s maintained a steady upward trend through the 2010s. The sudden increase in average ownership spans for vehicles is largely attributed to the 2008 financial crisis and ensuing Great Recession when many American consumers held on to what they had and delayed major purchases.
The price for new automobiles has increased more than 17% since 2020
As the average age of vehicles on American roadways gained steadily over the last five years, automobile prices skyrocketed over the last 24 months.
When the COVID-19 pandemic began, many U.S. auto dealership showrooms came to a standstill as nervous customers stayed away and social distancing guidelines forced many to temporarily close— even as their maintenance shops remained open as essential businesses. Dealership sales teams who didn’t have robust online purchasing and delivery systems in place quickly hit the gas on streamlining online shopping and socially distant delivery processes similar to that of their emerging competitors like Carvana.
Line chart showing cars available for sale was decreasing rapidly even before the pandemic.
Consumers have noticed an ever-dwindling selection of new vehicles to choose from on dealership lots as investory stock has plummeted since 2000. Manufacturers saw an inventory dip after the onset of the Great Recession, but had steadily replenished inventories in the mid-2010s to pre-recession levels.
Domestic auto inventories are at their lowest since data collection began in 1993. Demand for new vehicles fell after 2018 but shot back up in 2021 just as automakers were struggling to deliver new units to dealerships.
Line chart showing that new passenger car registrations are also trending downward.
New vehicles on the road are a boon for the automotive service industry, which gains a larger market of potential customers with each new Toyota Corolla and Ford Bronco. Inventory crunches on dealership lots that began in 2021 have given way to rising prices, fewer new vehicle sales, and fewer passenger cars being registered in each state.
This story originally appeared on The General and was produced and
distributed in partnership with Stacker Studio.
