The life expectancy of American vehicles has set new records as supply chain shortages make it more difficult for consumers to purchase new wheels.
According to data released by S&P Global Mobility on Monday, the average vehicle on the road this year is 12 years and 2 months, the highest in more than 20 years for which the data has been tracked.
The average age of a passenger car is much higher at 13 years and 1 month.
Todd Campau, deputy director of aftermarket solutions for S&P Global Mobility, told CBS Moneywatch: “The 13.1 car figure is the highest we’ve ever seen and it’s going up.”
The shift to private cars, away from public transport and taxis due to the pandemic, has increased demand for cars over the past year, and supply chain shortages have caused many automakers to cut production. The pressure caused drivers to cling to the car longer and some previously retired cars to be pulled out of the garage.
“A lot of the cars that have been sitting on the sidelines are back on the road in 2021,” Campau said.
“The value of the used car was so high that the individual chose to sell the vehicle he no longer needed and could get the best dollars,” he added.
The surge in used car prices is also “changing buy-to-replace decisions,” Campau said. Motorists are now more motivated to fix problems that would have caused their cars to be replaced before the pandemic.
One thing that doesn’t play a significant role, according to Campau, is the higher price for a new car. Automobile prices, which fell earlier this year, are on the rise again. The average used car price in April was $28,365, up $1,100 from March. according to In the Kelly Blue Book. Meanwhile, new cars average $46,526, which is about $5,000 more expensive than the sticker price a year ago. said.
Car sales this year are about 15% below pre-pandemic levels.
However, Campau said the reduced supply of new cars has a bigger role to play in driving down sales than higher prices.
“A dealership can basically sell any unit they can get their hands on. The price is higher for the consumer, but the consumer is willing to pay a premium to get a new vehicle,” he said. “What raises the average age is supply constraints. It’s the fact that we can’t meet the demand for new vehicles.”
While cars on the road are getting older, the average age of light trucks (11.6) has only increased slightly since 2016. This is because light trucks, including SUVs, crossovers, minivans, and pickups, are increasingly outpacing sedans and compact cars. Three-quarters of new car buyers are now in the “light truck” category.