According to a report by S&P Global Mobility, the average age of vehicles on the road in the U.S. has continued to increase for the sixth consecutive year. The average age of cars and light trucks in the U.S. is now 12.5 years, which is over three months older than the 2022 average. Passenger cars on average are older than light trucks, SUVs, and crossovers by about two years, and electric vehicles are much younger than other vehicles. The reason for this increase in the average age of vehicles is due to the supply chain issues that slowed the sale of new vehicles in the first half of 2022, and in the second half of the year, consumer demand slowed in response to inflation and climbing interest rates.
This year, the average price and payments for new vehicles remained high, which encouraged consumers to hold on to their current vehicles longer or purchase a used one. Either of those choices contributes to the aging of the fleet. This is the largest yearly increase in the average age of the U.S. fleet since 2008. In 2008, the average age of vehicles in use fell because of declining demand for new vehicles. Slowing demand is also a factor now, but supply constraints in 2022 drove the increase as well. In 2022, retail and fleet sales of new light vehicles in the U.S. dropped to 13.9 million, 8 percent down from 2021 and the lowest level recorded in over a decade.
Todd Campau, associate director of aftermarket solutions at S&P Global Mobility, said, “We expect 2023 is going to come back toward normal, but I still think we’re going to be challenged throughout this year to reach what’s been the norm. The norm, according to Campau, would be between 15.5 million and 17 million sales. “I don’t think we get there in 2023, but signs point to 2024 likely getting back to or near that range.”
S&P Global Mobility expects more than 14.5 million new vehicles to sell in the U.S. this year. The revival of new-vehicle inventory will apply downward pressure to the average age growth rate. Nevertheless, S&P Global Mobility expects more than 74 percent of U.S. light vehicles to be older than six years, and the number of vehicles aged six to 14 years to grow by about 10 million by 2028.
For now, older vehicles on the road are boosting the U.S. vehicle service industry. S&P Global Channel Forecast estimates that revenues of the U.S. light-duty aftermarket grew by about 8.5 percent in 2022 and may grow by 5 percent or more in 2023. U.S. consumers’ increasing preference for light trucks, SUVs, and crossovers, which are typically more costly to maintain than cars, has also been a booster for the service industry.
S&P Global Mobility expects the total number of passenger cars in use in the U.S. to drop below 100 million for the first time since 1978 within the next two years. By 2028, 70 percent or more of vehicles in use in the U.S. may be light trucks, SUVs, and crossovers. Increased demand for crossovers is driving growth in that category, Campau said.
The average age of battery-electric vehicles (BEVs) in the U.S. is 3.6 years, down from 3.7 last year. New BEV registrations increased by about 58 percent, according to S&P Global Mobility estimates, but BEVs continue to drain from use slightly more quickly than other vehicles, with about 6.6 percent of BEVs sold from 2013 to 2022 no longer in use compared with 5.2 percent of other vehicles.
