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People Are Holding on to Their Cars Longer And Those Giant Loans Aren't Helping

That’s right, it’s a Kia. You can tell because it says “KIA” on the front. Just a little tip for ya. Photo Credit: Kia
That’s right, it’s a Kia. You can tell because it says “KIA” on the front. Just a little tip for ya. Photo Credit: Kia

The average age of a car on the street in America has increased over the last decade, according to a new U.S. Department of Transportation study, suggesting that people are either buying more used cars or holding off on replacing the cars they already own. Maybe it’s because new cars are worse than old cars and folks just aren’t interested, but probably not.

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The U.S. Department of Transportation, via the Energy Information Administration, conducted a survey last year to analyze the average age of light-duty vehicles on the road, determining a 13 percent increase from an average age of 9.3 years in 2009 to 10.5 years in 2017.

Ages increased over every major vehicle type, with the average age of cars jumping from 9.5 to 10.3 years, vans from 8.8 to 10.9 years, SUVs from 7.1 to 8.5 years, and pickups from 11.2 to 13.6 years.

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The data was also broken down based on household income, and unsurprisingly, households with lower incomes held on to their cars longer, but the average age of higher-income household vehicles increased more than those used by lower-income households over the same period.

Related research mentioned in the report also indicated average fuel economy has increased, and average household spending on car maintenance also increased, which would make sense if people are holding on to their rides longer.

But don’t forget that the age is also impacted by the increasing amount of used cars in the market, as Car And Driver pointed out, thanks to the increasing amount of leasing and long term, low financing rates. So yeah, all of those 60-month loans do have to go somewhere, and the whole car world is changing with it.

Edited 10:45 p.m.: The reference to long-term leases have been edited to read as long-term loans in the headline and body.

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DISCUSSION

A lot of factors combined here.

Cars are more reliable. Will last longer, Start Consistently, not break down, rust, or fall apart.

Everyone learned (or should have learned) a major lesson about living within your means during the great recession. If your car works, then it doesn’t neet be be replaced.

The number of whizbang features in new cars isn’t as compelling. In the early 2000s it was like OMG heated seats and infotainment. Now everythings got leather and sunroofs and heated seats, and electronic everything and infotainment doesn’t matter because we all have smartphones.

I like my 2005 LR3 that I bought used in 2007 and I will probably never part with it.