With new and used cars still painfully expensive, Ryan Holdsworth says he plans to keep his 9-year-old Chevy Cruze for at least four more years. Limiting his car payments and his overall debt is a bigger priority for him than having a new vehicle.
The average age of a passenger vehicle on the road hit a record 12.5 years this year, according to data gathered by S&P Global Mobility. Sedans like Holdsworth's are even older, on average — 13.6 years.
Since the pandemic struck three years ago, the average new vehicle has rocketed 24% to nearly $48,000 as of April, according to Edmunds.com. Typical loan rates on new-car purchases have ballooned to 7%, a consequence of the Federal Reserve's aggressive streak of interest rate hikes to fight inflation.
Faced with deciding between making a jumbo payment and keeping their existing vehicles, more owners are choosing to stick with what they have, even if it means spending more on repairs and maintenance. It doesn't mean that most owners of older vehicles are necessarily stuck with constant repair bills. One reason people can hold their vehicles for increasingly long periods is that auto manufacturing has improved over time. Engines run longer. Bodies don't rust as quickly. Components last longer.
The average vehicle age, which has been edging up since 2019, accelerated this year by a substantial three months. And while 12.5 years is the average, Campau noted, more vehicles are staying on the road for 20 years or more, sometimes with three or four successive owners. On Friday, Weber said, one customer needed rear brakes, wheel bearings and exhaust system repairs. The customer decided to do only half the repairs and wait until later to decide whether to sink more money into the aging vehicle.S&P predicts that U.S. new vehicle sales will reach 14.5 million this year, from about 13.9 million last year. A big reason is that the supply at dealerships is finally growing.
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