According to a study from the automotive research firm R.L. Polk & Co., Americans are now holding on to their new car purchases much longer than in years past. Today’s typical new car buyer keeps their vehicle for almost six years, or 71.4 months to be exact. That number has increased by 18 months since 2006 alone. It should also be noted that new car sales figures are boosted by leases, which typically only last for two to four years, which bring the overall length of time owners keep their new cars down.
Polk also found that used car buyers are keeping their vehicles longer as well. Consumers of used passenger cars and trucks kept their vehicles an average of 49.9 months, which is 17.6 months longer than the 32.3 months reported in 2003. In addition, the trend of buyers keeping cars for longer periods of time has also pushed the average age of vehicles on U.S. roads to a record 10.8 years.
One of the biggest reasons for the decline in new car sales and the increase in overall vehicle age is attributed to the decline in the U.S. economy since 2008. With less disposable income available for a number of Americans, would-be buyers are choosing to hold on to their cars and pay off auto loans rather than trading in their vehicles for newer models.
Polk also said that people are holding on to their cars because of an increase in vehicle quality. In the past, the prevailing belief was that cars generally reached their performance limit at 100,000 miles, pushing drivers to purchase new vehicles once their vehicles’ perceived “life spans” were up. However, a lot of today’s drivers have been forced to keep their cars longer than this period, so they’ve consequently learned that their cars actually still performed quite well despite being over the established distance limitation.
To add to this, automakers have also lengthened their warranties. While most new, non-luxury brands already come with a three-year or 36,000-mile bumper-to-bumper warranty, many have opted to also extend coverage on drivetrain components like the engine and transmission for up to 10 years or 100,000 miles. Additionally, most luxury brands, and even Hyundai, typically carry a four- or five-year warranty that typically extends to 60,000 miles.
One bright spot for auto manufacturers is that the recent upswing in the economy, combined with the high average age of vehicles on the road today, has helped boost new car sales. Americans bought 12.8 million vehicles in 2011, which was up from 11.6 million in 2010. According to Polk, the number is expected to rise again in 2012, ranging from 13.7 million to 14.5 million this year.