America is not a nation that likes to drive old cars — at
least we weren’t until the financial crisis.
Ever since the end of the crisis, and the beginning of a
booming recovery in the US auto market, we’ve been doing just
Since about 2009 the age of a car or truck on US roads has
steadily averaged about 11 years — ancient, by American
Throughout the industry, the expectation has been that this
average vehicle age will drop, as American’s replace the old cars
and pent-up demand from post-crisis period is satisfied.
However, it doesn’t look like that’s happening. This is from
Bloomberg auto reporter Jamie Butters:
Even as U.S. sales of new vehicles roll along at
highs, improved durability continues
to extend the average age
of autos on the
road. That age is 11.6 years, said [IHS
Markit’s Mark Seng], up
11.5 years in
The average age increased about 3
percent during the five
years before the
recession that depressed sales in 2008
2009, leading to the bankruptcies of
General Motors and
Market observers had expected that a lot of older cars
would be retired due to a technology gap. Ten or 15 years ago
there’s wasn’t that much of a technology difference between
a new car and one that was a decade old. Today’s new cars,
with infotainment and driver-assist technology, and even
self-driving features can make a vehicle that’s just a few years
old seem like it runs on steam.
However, a need for affordable mobility appears to have
overcome that expectation, and — in truth —
car that’s a decade old was probably still designed and
engineered well enough to make it to 200,000 miles on the
odometer, if it’s well cared for.
So, it seems, we’re turning into a country that drives
pretty old cars for a while longer, and that’s a significant
change in how we’ve viewed car ownership.
Of course those older vehicles will also be replaced,
eventually. So the pent-up-demand driver of the US auto market
isn’t quite ready to go away. It’s a trend that’s bolstered the
sales boom that led to a record year in 2015, with 17.5 million
new vehicles in total rolling off dealer lots.
Analysts and auto executives thought that as old cars were
replaced, average age would decline and the market would be left
with easy credit and cheap gas as the core factors encouraging
consumers to buy new vehicles. It now looks like the factors that
have propelled sales in the past will continue to kept them going
in the future.
What that means is that even if we see a predictable,
cyclical sales downturn in the US in the the next two years, it
might not be all that precipitous.