Fixing instead of replacing: Average age of vehicles on US roads hits a record highhttps://apnews.com/article/cars-older-record-age-prices-shortages-supply-6e3273208399803a402e707e1393475cThe 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.
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.
It’s all pushed the national average monthly auto loan payment to $729 — prohibitively high for many.
Used vehicle prices, on average, have surged even more since the pandemic hit — up 40%, to nearly $29,000. With an average loan rate having reached 11%, the typical monthly used-vehicle payment is now $563.
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.
In such cases, the third or fourth owner is getting a much older car than they would have in the past. Nearly 122 million vehicles on the road are more than a dozen years old, Campau said. S&P predicts that the number of older vehicles will keep growing until at least 2028.
S&P predicts that U.S. new vehicle sales will reach 14.5 million this year, from about 13.8 million last year. A big reason is that the supply at dealerships is finally growing.
Still, no one is predicting a return to pre-pandemic annual sales of around 17 million anytime soon.
