The US auto industry is receiving another sign that its recovery will survive in the long-term: the feared average age of cars on the road is finally showing incipient signs that it wants to go down.
That’s according to Experian Automotive, which says that average age of all cars on the road in the US was 10.7 years during the third quarter of last year, a slight uptick for the quarter – though the increase has slowed from last couple of years. The average age of cars on US roads skyrocketed after the latest great recession, with fewer new cars being sold and many consumers holding on to their ride longer than before. Experian Automotive said that now the scenario is poised for an 180 degrees turn and by looking at a smaller segment of the cars – aged 15 model years or less – the average age has actually already gone down a notch. That’s easy to understand: auto sales are increasing and the number of new cars is soaring, which increases the quota of trading-ins for older cars. For the most recent 15 model years, the average age dropped from 7.5 years in the third quarter of 2013 to 7.4 years in the third quarter of last year.
Car companies saw a dreadful scenario unfold: Americans would cease purchasing or leasing a new vehicle every three or four years. A sensible decision, since today’s modern cars can easily outlast that figure three or four times. But for the auto industry it would be an apocalyptic scenario – car manufacturers after they wholesale a car to the dealer they consider it sold, period.