SOUTHFIELD, Mich. –
Like many of us, cars are also getting older these days, too.
According to IHS Markit, the average age of a car on the road is roughly one month higher than the 2019 average, coming in at 11.9 years.
There are a few factors at play pushing this slight rise in age, but the company notes one particular bright spot: “Though slight, the increase can generate new business opportunities for companies operating in the aftermarket and vehicle servicing sector in the United States,” IHS said in a news release.
So, what’s leading to the average car being a bit longer in the tooth? One factor is the “plateaued” new-car sales counteracting gains in scrappage rates, the company said.
Climbing vehicle prices and several market segments showing “underlying weakness” have pushed the age up, according to IHS, with consumers mulling over budgets, choosing long-term financing or just keeping their vehicles longer, the company said.
And COVID-19 certainly has played a part, as well.
“At the start of 2020, all signs were pointing to moderate growth of the average age of vehicles through the first half of the decade, and there was certainly growing pessimism about how long the strong economic fundamentals could last,” said Todd Campau, IHS Markit’s associate director of aftermarket solutions, in a news release.
“However, the COVID-19 pandemic has created the perfect storm to accelerate U.S. light vehicle average age in coming years, This should be a positive side effect for the aftermarket, as the majority of repairs for older vehicles come through the aftermarket channel.”
In terms of vehicle population, there are now more than 280 million vehicles in the U.S., according to the IHS data, a 1% year-over-year climb.
“Based on the analysis, the volume of vehicles 6 to 11 years old is expected to expand, which presents major opportunities for the sector due to dealer service plans and warranties expiring, netting new business opportunities for independent service and repair shops,” IHS said.
“Volumes of vehicles 12 to 15 years old, which have been an increasing source of revenue for the aftermarket, are expected to contract as aftermath of the lower volumes during the 2008-09 recession, which are still working their way through the vehicle population.”