On Average, Americans Keep Their Cars on the Road for Over 12 Years
Running for the Record
Over the last five years, the length of time Americans hold onto their vehicles has ticked upward. In 2020, the average vehicle age in the US exceeded 12 years for the first time, and in 2021 the figure reached a record high of 12.2 years. The electric-vehicle market has been an outlier as it has actually seen a modest decline in the length of ownership.
Quality improvements have extended cars’ lifespans, however in the last couple of years, there have been other factors at play pushing up the age of vehicles on the road.
High Prices, Few Choices
The inflationary fallout of the pandemic triggered by supply-chain snarls has triggered high prices and low inventory. A computer-chip shortage reduced vehicle production, all while the Russia-Ukraine war exacerbated supply disruptions caused by COVID-19.
As the prices of both new and used vehicles rose amid dwindling supply, many consumers decided against swapping out their car. While the used-auto market has cooled a bit recently, the price of new vehicles keeps marching upward. Some industry observers believe this trend could continue into 2023.
Profit Potential in the Toolbox?
Some analysts believe current industry dynamics offer investment opportunities in auto parts. The idea is that transportation is not a discretionary expense. People need their vehicles to get to work and to the grocery store. As such, reliable vehicles will take priority in Americans’ budgets.
For recession-wary consumers, fixing an older car may be preferable to shelling out top dollar on a new car. Others may decide to pull out the toolbox and buy up replacement parts while waiting for the model they want to finally show up at the dealership.
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