Americans are keeping their vehicles longer than ever. According to new data from S&P Global Mobility, the average age of cars and light trucks on U.S. roads is a record 12.5 years this year. That's up three months over the 2022 analysis.
Average Age of Light Vehicles in the U.S. Hits New Record High of 12.5 years
There are more than 284 million vehicles in operation on U.S. roads. So why is the average age of vehicles on the road going up? S&P Mobility says as predicted, constrained new vehicle sales are continuing to impact and put upward pressure on the average age. Researchers also say the increase of light truck/utilities on the nation's roads means passenger cars will fall beneath 100 million for the first time since 1978.
It's the sixth straight year of an increase in the average vehicle age of the U.S. fleet. Researchers also report that it's the highest yearly increase since the 2008-2009 recession. During those years, there was a sharp decline in new vehicle sales which caused the average age to accelerate beyond what was traditional.
Last year, there were several factors involved in slower new vehicle sales. For one there was a lack of inventory, that is slowly rebounding. Also researchers say there was slowing demand due to interest rates and inflation. These factors combined caused the retail and fleet sales of new light vehicles in the U.S. to fall 8% from 2021's 14.6 million units to 13.9 unites in 2022. S&P Mobility says that's the lowest level recorded in over a decade.
"We expected the confluence of factors impacting the fleet coming out of 2021 would provide further upward pressure on average vehicle age. But the pressure was amplified in the back half of 2022 as interest rates and inflation began to take their toll," said Todd Campau, associate director of aftermarket solutions for S&P Global Mobility.
Analysts do say they expect sales to rebound this year and surpass 14.5 million. This would curb the rate of average age growth in the coming year.
"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," said Campau.
Other Key Takeaways
Impact to Service/Aftermarket Industry
An aging fleet means more growth for the service and aftermarket industry. As the vehicle fleet ages, consumers tend to invest more to keep their aging vehicles running, barring some exceptions.
"Traditionally, the 'sweet spot' for aftermarket repair was considered 6-11 years of age, but with average age at 12.5 years, the sweet spot for aftermarket repair is growing," said Campau. "There are almost 122 million vehicles in operation over 12 years old."
In total, researchers say that vehicles older than six years will account for more than 74% of the vehicle fleet in 2028, according to S&P Global Mobility estimates.
More Light Trucks/Utilities on Roads Than Cars
Researchers say in 2022, 78% of all new vehicles registered in the U.S. were light trucks/utilities which represent nearly 63% of the population. Its analysis shows that within the next 18-24 months, the total volume of passenger cars – sedans, coupes, wagons, hatchbacks – on the road in the US.. could drop below 100 million for the first time since 1978.
Researchers report that new battery electric vehicle registrations achieved a 58% gain year over year, to nearly 758,000 units in 2022. The average age in 2022 was 3.6 years, down from 3.7 years last year.
To read the complete S&P Mobility analysis, click here.
Downtown Houston Traffic. Photo Credit: Trong Nguyen/Shutterstock.com.