With Cars In Short Supply, US Drivers Are Holding Onto Their Vehicles Longer Than Ever


Tuesday, May 24th 2022, 4:43 am
By: CBS News


The average age of an American vehicle has hit a new a record, as supply-chain shortages make it harder for consumers to get their hands on new wheels. 

The average vehicle on the road this year is 12 years and 2 months old, according to data released Monday by S&P Global Mobility — the highest number in the 20-plus years the data has been tracked. 

The average age for passenger cars is even higher, at 13 years and 1 month. 

"It is a record — 13.1 for passenger cars is the highest we've ever seen it, and it's continuing to climb," Todd Campau, associate director of aftermarket solutions at S&P Global Mobility, told CBS MoneyWatch.

A pandemic-driven shift toward private cars — and away from public transit and taxis — juiced the demand for cars last year, while supply-chain shortages caused many automakers to cut back on production. That squeeze has prompted drivers to hang on to their cars for longer, and led to some formerly retired cars to be brought out of garages. 

"A lot of the vehicles that have been sitting on the sidelines returned to the road in 2021," said Campau. 

He added, "It's been a fascinating thing to watch — with the values of used vehicles so high, individuals chose to sell vehicles that maybe they didn't need anymore, and they were able to get top dollar for them." 

Surging prices for used cars are also "changing the buy-versus-replace decision," Campau said. Motorists are now more motivated to repair issues that before the pandemic would have led them to replace their cars. 

One thing that isn't playing much of a role, according to Campau, are higher prices for new cars. Car prices, which dipped early this year, have resumed their upward march. The average price for a used car hit $28,365 in April, an increase of $1,100 from March, according to Kelley Blue Book. New cars, meanwhile, cost an average of $46,526 — about $5,000 more than sticker prices a year earlier, KBB said.

The pace of car sales this year is about 15% below its pre-pandemic level. 

But Campau said the reduced supply of new cars is playing a bigger role in keeping sales down than the higher prices. 

"Dealerships can sell basically any units they can get their hands on. The prices are higher for consumers, but consumers are willing to pay a premium to get a new vehicle," he said. "It's really a supply constraint that's driving the average age up — the fact that we can't meet demand for new vehicles."

While cars on the road are getting ever older, the average age of a light truck, 11.6 years, has only slightly increased since 2016. That's because light trucks — including SUVs, crossovers, minivans and pickup trucks — are increasingly beating out sedans and compacts among new-vehicle buyers, with three-quarters of new vehicle purchases now in the "light truck" category.

First published on May 23, 2022 / 6:34 PM

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