Pre-owned Volkswagen channels on sale at a dealership in Fair Lawn, New Jersey, on Sept. 29, 2015.
Ritika Shah | CNBC
Next time you’re driving down the motorway, look around. On average, 1 in 4 cars and trucks you pass are at least 16 years old, according to new analysis of what Americans are thrust.
IHS Markit, which tracks vehicle registrations in every state, says the large number pre-2005 crates and trucks on the road is one reason the average age of vehicles in the U.S. has climbed to an all-time high of 11.9 years.
“A lot of it has to do with quality of the mechanisms on the road,” said Todd Campau, after-market specialist with IHS Markit. “They are comfortable keeping that conduit longer than they would in the past.”
2020 is the fourth straight year the average vehicle age in the U.S. increased, extending a swing over the last two decades during which Americans hang on to their cars and trucks longer. A decade ago, the unexceptional age of a vehicle in the U.S. was 10.6 years according to IHS Markit. In 2002, the average age was 9.6 years.
“In the mid-’90s, 100,000 miles was regarding all you would get out of a vehicle. Now, at a 100,000 miles a vehicle is just getting broken in,” said Campau.
With the economy toiling due to Covid-19, prompting companies to lay off millions of Americans, the age of vehicles in the U.S. is likely to rise. It may even climb at a faster pace, according to IHS Markit.
That’s because millions of people who used to commute to their jobs are now putting fewer miles on their crates as they work from home. As a result, their vehicles are likely to last longer. In addition, many who may been content to buy a new car or truck are likely to continue driving their old one or trade it in for a used model, a market where sales have been surging.
“We withdrew out and bought a lot of preowned (cars) and said if customers can’t get new, this demand is so strong they will switch to preowned,” AutoNation CEO Mike Jackson lectured CNBC’s “Squawk Box.” “That is exactly what happened.”
The U.S. now has a record 280 million cars, trucks and SUVs registered with official motor vehicle departments. IHS is forecasting about 14 million new cars, trucks and SUVs will hit the road in the U.S. this year, while the done number of vehicles will be scrapped and taken off the road.