Average age of cars in US hits record high of well over a decade
The average age of cars on US roads hit a record 12.1 years in January, setting up strong markets for sales of new vehicles and for repairs and maintenance.
Driven by pandemic shutdowns and rising prices, the age of cars and light trucks rose from 11.9 years in January 2020, analytics firm IHS Markit said Monday. As owners keep their vehicles longer, more old cars will need maintenance and eventually need to be replaced.
“There doesn’t seem to be a loser here. New vehicles win. The aftermarket wins," said Todd Campau, IHS Markit’s associate director of aftermarket solutions. “The older the vehicles are, the more opportunity there is that they are reaching the end of life, which feeds new vehicle buying."
Also check these Cars
A global shortage in semiconductors has crimped new-car production. That’s pushing prices higher and sending retail consumers and rental-car companies to the used-vehicle market, driving up prices there as well. Used-car costs surged 30% in May from a year earlier, according to the Bureau of Labor Statistics.
Even before the Covid-19 pandemic, vehicle owners were taking out longer loans and leases to offset rising new-car costs, prompting them to hold on to the vehicles longer, Campau said. Record sales before the pandemic also led to a wave of cars that have fallen out of warranty.
Those vehicles are in the “sweet spot" for auto-repair shops, he said.
“There’s money to be made across the board, but I would probably say the aftermarket stands to gain the most from the used vehicle fleet," Campau said.