Another record set in aging cars

[Alex Snyder]

S&P Global data is out on the average age of vehicles on US roads. 12.5 years is the average age today. In May of 2022, it was 12.2 years.

• The average age of passenger cars is 13.6 years
• The average age of trucks and SUVs is 11.8 years
• EV averages have dropped to 3.6 years (down from 3.7 in 2022)
• Light trucks and SUVs account for 63% of the population
• 284 million vehicles are in operation in the United States
• There are 2.12 EVs in operation in the United States
• 122 million vehicles are over 10 years old
• People are holding on to their cars longer because of the tight new car supply and inflation
• 2021 New car SAAR was 14.6M, 2022 was 13.9M, and 14.5M is the expectation for 2023 (S&P expectation)

We used to get excited when the 8+ year-old cars came in for service because that was nearly guaranteed customer pay. With fewer techs, supply is short on shop time, so it is going to get more expensive to maintain these older cars. A good time to be in the service business!

Between the average price of a new car hitting $47,713 ($850/mo.) in April and $28,381 ($500/mo.) for a used car, it makes sense people want to hold onto their current wheels.

I predict the growing repair needs of their older vehicle is going to make more customers consider the service relief a new car will bring soon.

Sources:
AutoRemarketing
Automotive News
Forbes

 

[Alex Snyder]

To further color my prediction that more customers will stop paying for repairs and opt for new car purchases again...

I'm in this boat right now. My wife's car is a diesel Mercedes "tank" with 140K miles. I love diesel for its longevity and fantastic gas mileage. I'm sure my wife's SUV will run for many hundreds of thousands of miles more... like our F350 and tractors. But, the rest of the car is not diesel. One of the airbag suspension components broke and is currently in the shop... $1,500. Last year the front drive shaft came loose, and we had all the usual replacement items for a 100K+ mile vehicle. We probably spent around $3,000 on it last year + a bunch of shop downtime.

For me, I'm looking at all this as a win. We don't have a car payment, so I'm avoiding what would be around $12,000 a year in payments and spending less than $5,000 on maintenance and repairs. I'm good!

On the other hand, my wife is now saying things like, "What if I get stranded with the kids." Ugh. The financial death spiral statement. Now we are in the market for a new car.

Time in the shop is inconvenient. Very few service departments provide an experience one looks forward to. I believe people will pay more for the perceived convenience a new car will be trouble-free for 3 to 5 years. It is time to up your game on taking sales into the service drive. Let these people know you're interested in their business even if it isn't time for them to pull the trigger this month.

 

[craigh]

On the other hand, my wife is now saying things like, "What if I get stranded with the kids." Ugh. The financial death spiral statement. Now we are in the market for a new car.

I drive a Focus ST, have had it paid off for years.
Anytime the fuel level gets below 1/3 of a tank, it chokes and loses power and you have to pull over, reset and then it happens again 10 minutes later. Been in for a recall, got it fixed and it happened twice on the way home from the dealership.

I want a new car, but I am not touching these interest rates with a 10-foot pole.
Then again.... Acura Integra Type S (Arriving Summer 2023) | Acura Canada