Cars and trucks are built far better than in prior generations and people are keeping them longer, nearly 12 years.
That’s the finding of a massive IHS Markit study of vehicle registrations to learn the age of light vehicles people are driving.
IHS found that the average age of light vehicles in operation, or VIO, in the U.S. stood at 11.8 years at the start of this year. That’s up from 11.7 years last year, IHS said.
“Better technology and overall vehicle quality improvements continue to be key drivers of the rising average vehicle age over time,” said Mark Seng, director, global automotive aftermarket practice at IHS Markit.
Consumers started to learn that cars and trucks have become more reliable during the last recession. People held on to vehicles longer because they didn’t have the money to buy a new car or they were worried about job security.
LIGHT VEHICLE FLEET GROWS
There are now a record 278 million light vehicles on U.S. roads. That’s an increase of more than 5.9 million, or 2.2 percent, since 2018. This represents one of the highest annual increases the U.S. auto industry IHS Markit has seen. It is second only to the 2.3 percent growth in 2016.
A big and aging fleet presents lots of opportunities for service shops and auto parts companies, Seng said.
IHS found that the oldest segment of the U.S. vehicle fleet is growing the fastest.
The research firm estimates that trucks and cars 16 years and older will jump 22 percent from 2018 to reach 84 million vehicles in 2023. That’s a big change from historic trends. Back in 2002 there were less than 35 million vehicles 16 years or older.
Seng said repair shops and auto parts sellers need understand how that trend affects their businesses.
“Rather than selling to the first or second owner of the vehicle, it might be a third, fourth or fifth owner,” he said.
That means branding and price strategies will become more important as the consumers decide how much they are willing to pay for a repair based on the age of their vehicle, Seng said.
DIFFERENT REGIONS, DIFFERENT TRENDS
Vehicle age changes based on location, according to IHS. Weather is clearly a factor behind why cars and trucks in the West last longer than the Eastern Seaboard.
The average age of light vehicles in the Western U.S. is 12.4 years. But in the Northeast it is 10.9 years. Montana has the oldest average age with light vehicles averaging 16.6 years. The youngest average age is in Vermont, 9.9 years.
The popularity of light trucks – including crossovers and SUVs – vehicle age is changing the age of different vehicle segments. From 2018-2019, the average age of passenger cars increased 2.2 percent while light trucks aged at a rate of just 0.1 percent. Light trucks, including crossovers and SUVs, now account for about 70 percent of new vehicle sales.