photos by Boyd Loving
the staff of the Ridgewood blog
Ridgewood NJ, the average age of cars and light trucks in the United States has reached an all-time high of 12.6 years in 2024, according to a new market analysis. This marks an increase of approximately two months from the previous year. With inflation driving up costs across the board, many Americans are finding it more economical to maintain their current vehicles rather than purchase new ones.
Old Reliable: Why We’re Keeping Our Cars Longer
The allure of a new car is undeniable, but the financial aftermath of the pandemic has made such purchases difficult for many. Disrupted supply chains have caused delays and price hikes, while car insurance costs have surged by about 57% since April 2020. Additionally, the average rate for a 48-month new car loan reached 8.3% last September. Despite advancements in electric vehicle (EV) technology, adoption rates have lagged, prompting many automakers to delay their plans for all-electric lineups.
Given these challenges, it’s no surprise that drivers are holding onto their vehicles longer or opting for more affordable used cars. This trend has shifted the age distribution of vehicles on the road. In 2019, vehicles younger than six years old made up about 35% of the total, but now they represent less than 90 million units, according to S&P Global Mobility.
A Glimmer of Hope for New Car Sales
Despite the trend toward older vehicles, there are signs of recovery in the new car market. New car sales bounced back to 15.5 million units last year, up from less than 14 million in 2022. Cox Automotive forecasts that 2024 could be the best year for new car sales since 2019, as interest rates are expected to decrease in the latter half of the year. The fact that people nowadays have access to more funding options, with the emergence of dealerships like DriveWise Cheyenne that specialize in bad credit financing, is also contributing to the increase in new car sales.
Auto Parts and Service Centers Benefit
While automakers and dealers have struggled, auto parts shops and service centers have thrived. O’Reilly Auto Parts saw its sales rise to $15.8 billion last year, up from $11.6 billion in 2020. Similarly, AutoZone reported sales of $17.5 billion, compared to $12.6 billion in 2020. Both companies have rewarded their investors handsomely, with share prices increasing 170% and 165%, respectively, over the past five years.
Shifting Preferences: SUVs, Trucks, and Crossovers Dominate
Consumer preferences have also shifted dramatically. Since 2020, more than 27 million passenger cars have been removed from the US vehicle population, while only about 13 million new ones have been registered. In contrast, over 26 million light trucks, including SUVs and crossovers, have been scrapped, and nearly 45 million new ones have been registered. It appears that Americans increasingly prefer vehicles that offer greater versatility and ruggedness.
By the end of this year, Cadillac will be the only member of the Big Three—Ford, General Motors, and Chrysler—to offer a traditional four-door sedan, according to Slash Gear. The demand for vehicles capable of handling diverse terrains seems to be driving this shift.
In summary, while the average age of US vehicles continues to climb due to economic pressures, there are signs of a rebound in new car sales. Meanwhile, the auto parts and service industry is experiencing robust growth, and consumer preferences are shifting toward more versatile vehicle models.
Take the Wall Street Walking Tour https://www.facebook.com/unofficialwallstreet #WallStreetTours,#FinancialDistrictExploration, #ExploreWallStreet, #FinancialHistoryTour, #StockMarketExperience, #FinancialDistrictDiscovery, #NYCFinanceTour,#WallStreetAdventure
