2010 looks as if a lifetime in the past. Barack Obama was a comparatively younger president in his first time period. Taylor Swift grew to become the youngest artist to win the Album of the Yr Grammy. And the common automotive driving round at present was bought for the primary time.

The typical automotive on American roads is now 12.5 years outdated, based on a brand new research from S&P World Mobility. The determine, researchers say, is three months increased than final yr’s complete.

Common Age Elevated Extra Than Regular Final Yr

This marks the sixth straight yr through which the common automotive’s age elevated, which occurs when Individuals gradual their buying of latest automobiles and work to maintain their outdated automobiles operating longer.

“It additionally displays the very best yearly enhance because the 2008-2009 recession, which induced acceleration in common age past its conventional price as a result of sharp decline in new-vehicle gross sales demand,” researchers say.

Fewer Capable of Purchase New Vehicles

The growing age displays how onerous it’s for Individuals to purchase new automobiles. The worth of the common new automotive rose month-to-month for many of two years earlier than lastly peaking final December. Costs have now fallen each month of 2023 however stay traditionally excessive.

Individuals paid $48,275 for the common new automotive in April – about 3.5% increased than a yr in the past.

Excessive costs and excessive rates of interest are protecting many consumers out of the automotive market. Automakers, conscious that solely high-income, strong-credit customers can simply automotive store, are constructing largely costly autos. The sub-$25,000 automotive has virtually disappeared from the market.

Used Automobile Costs Excessive, Too

Used automobiles, too, are close to all-time worth highs. The typical used automotive offered for $26,799 in April. That’s 5.5% lower than a yr in the past however nonetheless traditionally excessive.

Specialists anticipate used automotive costs to stay comparatively excessive for years. The 2008 recession means fewer older used automobiles can be found on the market at present. COVID-19-related manufacturing slowdowns imply fewer newer used automobiles.

Good Information for Restore Retailers

With many consumers squeezed out of automotive procuring, Individuals are spending extra to maintain their present automobiles operating.

S&P notes, “An older fleet means autos will proceed to want restore work and repair to carry out accurately.” Automobile components giants AutoZone and O’Reilly Auto Elements have seen revenues soar almost 40% since 2019.

“Historically, the ‘candy spot’ for aftermarket restore was thought of 6-11 years of age, however with common age at 12.5 years, the candy spot for aftermarket restore is rising,” mentioned Todd Campau, affiliate director of aftermarket options for S&P World Mobility. “There are virtually 122 million autos in operation over 12 years outdated.”