Cars in America are getting old

A study by research firm S&P Global Mobility found an increase in the average age of passenger cars in circulation in the United States. One of the main factors is the impact of the COVID-19 pandemic.

According to a special study, the average age of passenger cars in circulation in the United States has reached an all-time high, up nearly two months from last year. This is the fifth year in a row that the average age of vehicles in the US has increased, even as the fleet has rebounded with a 3,5 million increase last year.

According to a study by a specialist firm, the average age of cars and light trucks in circulation in the US is 12.2 years.

The report highlights that the average life of a passenger car is 13.1 years and a light truck is 11.6 years.

Average life of passenger cars

According to the analysis, the global shortage of microchips, combined with the associated supply chain and inventory issues, are the main factors driving the average age of vehicles in the US.

Restrictions on the supply of chips led to a constant shortage of parts for automakers, who were forced to cut production. The limited supply of new cars and light trucks amid strong demand for personal transportation may have encouraged consumers to keep using their existing vehicles longer as stock levels of new and used vehicles rise across the industry.

In the same way, the lack of stocks forced attention during the crisis to the growing demand,

It's better to fix your car than to buy a new one.

This provided a compelling reason for vehicle owners to opt to repair existing units rather than replace them with new ones.

The situation with the acquisition of a new car is more difficult, given that the country's economy is going through hard times, reaching historical levels of inflation and fears of a possible recession.

Impact of the COVID-19 pandemic

The increase in the average life of passenger cars has also increased since the beginning of the pandemic, as the population tended to favor private transport over public transport due to health restrictions. There were those who had to keep using their cars at all costs, which also prevented them from being able to replace them, and there were those who wanted to buy a new car but couldn't in the face of unfavorable prices and inventory. This made them look for used cars.

The report says: “The pandemic pushed consumers away from public transport and shared mobility towards personal mobility, and as vehicle owners were unable to retrofit their existing vehicles due to new vehicle supply bottlenecks, the demand for used vehicles increased further pushing up the average age. Vehicle".

The study also highlights that the car fleet in circulation grew in 2022, likely because cars that were out of use during the pandemic due to exit restrictions returned to the streets at that point. “Interestingly, the vehicle fleet has grown substantially despite low new vehicle sales as units that left the fleet during the pandemic have returned and the existing fleet performed better than expected,” S&P Global Mobility said.

New opportunities for the automotive industry

These conditions could also work in the automotive industry's favor, as while sales are falling, they may cover demand for aftermarket and automotive services. 

“Combined with an increase in average age, high average vehicle mileage points to the possibility of a marked increase in repair revenue next year,” said Todd Campo, deputy director of aftermarket solutions at S&P Global Mobility, in an interview with IHS Markit.

Ultimately, more pandemic-retired vehicles returning to the fleet and higher residual value of aging vehicles on the road mean growing business potential for the aftermarket segment.

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