The average age for all U.S. vehicles on the road reached a record, just barely, at 11.5 years, according to IHS Automotive, up from 11.4 years a year ago.
The upshot is, even though annual new-vehicle sales are at near-record levels, cars simply last longer, so the average age has crept higher. Last year, IHS Automotive reported that the average age had stayed flat, after several years of increase.
Besides the new record for average age, IHS Automotive said there is a new record for the number of vehicles on the road, at 257.9 million. That was an increase of more than 5.3 million since a year earlier, and the biggest increase on record.
The latest annual IHS Automotive analysis was announced on July 29, but it’s based on registration data as of Jan. 1, 2015.
That “average age” sounds simple, but it has a lot of moving parts. The pace at which Americans buy new cars brings down the average. So does the scrappage rate. A car is considered scrapped when it is no longer registered, regardless whether it is actually scrapped.
IHS Automotive said based on the Jan. 1 registration figures, the number of vehicles scrapped in 2014 declined slightly from 2013, to just over 11 million cars and trucks.
Scrappage and new-vehicle sales bring down the average, while the tendency of people to hang onto their cars longer increases the average. IHS Automotive said the average person keeps a car about 6.5 years.
Hanging onto a car also usually means the same consumer isn’t buying a new vehicle. That doesn’t always mean the same thing. In the run-up to the Great Recession, with Employee Pricing for Everyone, and zero-percent interest loans, analysts were starting to see an increase in the number of vehicles per household.
That meant a growing number of consumers bought additional cars without getting rid of the same number of old ones. The recession stopped that trend in its tracks.
