The average age of a vehicle in the USA now stands at 12.2 years.
It may be a cliche, but few things smell as good as a brand new car. Taking delivery of a box-fresh vehicle is an unrivaled feeling. But this is an experience fewer Americans can indulge in, as the chip crisis and supply chain woes continue to thwart new car sales.
Pent-up demand brought on by the Covid-19 pandemic has left manufacturers in a panic, with many unable to fulfill orders as they battle impatient customers on one end and industry issues on the other. Take Ford as an example. The Mustang Mach-E has proven so popular that the Blue Oval has, essentially, sold its entire 2022 allocation.
This unrelenting desire for new vehicles has seen some dealers employ nasty tactics, placing exorbitant markups on new vehicles. This has trickled down to the used car market as well. As a result, American motorists are keeping their cars for longer than ever before, says a report from S&P Global Mobility.
The report makes for interesting reading. The average age of light vehicles in the USA now stands at 12.2 years in 2022, representing an increase of nearly 2% compared to 2021. This median has been consistently rising for five years and is largely centered around limited supply and high demand for new vehicles. This is forcing would-be car buyers to keep their cars for longer.
Speaking to Automotive News, S&P's Todd Campau clarified the situation. "People do still feel the need to have a vehicle available to them, maybe even more coming out of the pandemic, so that's caused the vehicle fleet just to grow a little bit ... and because the new-vehicle sales haven't been available, it's been growing from within really from vehicles that have been on the road, and they're just staying available longer."
Interestingly, a decline in vehicle scrapping has also contributed to this increased average age.
Citing data from Cox Automotive, the publication notes the average age of US vehicles has been on the rise since 2011. Studies indicate an increase in the sale of high-mileage vehicles (as much as 7%) in Q1 2022. This sits in sharp contrast to pre-pandemic buying habits - vehicles with mileages above 150,000 miles were considered undesirable for larger retailers.
Intriguingly, the average age of electric vehicles has declined, notes the S&P Global report. The lower average age of 3.8 years (3.9 in 2021) can be attributed to the massive increase in electric vehicles on American roads. The total number of EVs in operation rose by nearly 40%. This is only set to lower in the coming years, as electric vehicles enjoy greater acceptance and popularity.
The analytics company expects the average age to increase well into 2023, with Campau telling Automotive News it should level out "once the new-vehicle supply starts to catch up with demand ... we could see average age maybe even come down slightly."