Americans Holding onto Cars Longer as New Vehicle Costs Rise
WASHINGTON (TND) — Recent reports indicate that Americans are holding onto their cars longer than ever before due to the rising costs associated with purchasing a new vehicle. According to data from S & P Global Mobility, the average age of an American vehicle has reached a record high of 12.6 years, marking a three-month increase from the previous year.
“With the average age of vehicles on the road continuing to rise, more cars are entering the prime range for aftermarket service, typically falling between 6 to 14 years old,” stated Todd Campau, aftermarket practice lead at S & P Global Mobility. “With over 110 million vehicles falling within this age range, which accounts for nearly 38% of the total fleet, we anticipate a further increase to an estimated 40% through 2028.”
In a related development, J.D. Power reported that the average selling price of a new vehicle in the U.S. exceeded $45,000 last month, marking a decrease of over $2,000 from the peak in December 2022. This trend has prompted individuals like M.K. from Virginia to reconsider purchasing a new car. “New car? I don’t have money to buy a new car. Everything is going up now, everything is up,” M.K. expressed, suggesting that he may wait five years or more before considering a new purchase.
Financial therapist Nate Astle of Beyond Finance emphasized the importance of saving money by prolonging the use of an existing vehicle. “I absolutely love my old car. I have a 2005 Corolla that is still kicking, and I love that thing,” Astle shared. Amidst concerns over inflation and high consumer costs, Astle recommended preparing for the eventuality of needing a new vehicle by saving up for a down payment. He cautioned against allowing savings from holding onto an older car to be depleted by other expenses, advising individuals to build a financial buffer for potential emergencies.
Leaders at S & P Global Mobility highlighted the improved durability of modern vehicles, noting that individuals are also delaying new car purchases to consider options such as electric vehicles or hybrids. However, concerns remain regarding the availability of sufficient charging infrastructure to support these environmentally friendly alternatives.