Used Volkswagen vehicles for sale at a dealership in Fair Lawn, New Jersey on September 29, 2015.
Ritika Shah | CNBC
The next time you drive down the road, look around you. On average, 1 in 4 cars and trucks that pass are at least 16 years old, according to a new analysis of what Americans drive.
IHS Markit, which tracks vehicle records in all states, says the large number of pre-2005 cars and trucks on the road is one reason why the average age of vehicles in the U.S. has raised to a historical maximum of 11.9 years.
“A lot has to do with the quality of the vehicles on the road,” said Todd Campau, IHS Markit aftermarket specialist. “They feel comfortable holding that vehicle longer than in the past.”
2020 is the fourth year in a row that the average age of vehicles in the US has risen, spreading a trend in the past two decades during which Americans hold on to their cars and trucks longer. A decade ago, the average age of a vehicle in the US was 10.6 years according to the IHS Markit. In 2002, the average age was 9.6 years.
“In the mid-1990s, 100,000 miles was almost everything you could get from a vehicle. Now, 100,000 miles away, a vehicle is making its way,” Campau said.
With the economy struggling due to Covid-19, which prompted companies to fire millions of Americans, the age of vehicles in the US is likely to rise. It may even rise at a faster rate, according to IHS. Markit.
This is because millions of people who used to travel to their jobs are now putting fewer miles in their cars while working from home. As a result, your vehicles are likely to last longer. Also, many who are ready to buy a new car or truck are likely to continue to drive the old one or trade it in for a used model, a market where sales have increased.
“We went out and bought a lot of used cars and we said that if customers can’t get new ones, this demand is so strong that they will switch to used ones,” AutoNation CEO Mike Jackson told CNBC’s “Squawk Box”. “That is exactly what happened.”
The United States now has a record 280 million cars, trucks, and SUVs registered with state motor vehicle departments. IHS forecasts that about 14 million new cars, trucks, and SUVs will hit the road in the United States this year, while the same number of vehicles will be scrapped and pulled off the road.
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