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The life expectancy of the average automobile was only 6.75 years in 1930. It is almost double that now and shows no signs of stopping.
As cars and trucks have continued to become longer lived, the number of operational vehicles in the United States hit a record high this year. Despite the automotive genocide that was Cash for Clunkers, the average vehicle on U.S. roads has grown in age since the financial crisis. Either through necessity or personal preference, Americans are currently holding onto their cars longer than ever before.
According to IHS Markit, the average age of light trucks and cars reached 11.6 years in 2016. The information analysis firm, which collected and analyzed registration data, estimates that the increase in age also accounts for the record 264 million light vehicles currently on U.S. roads.
Even though the rate of increase has slowed against higher-than-average new car sales, IHS Markit Director Mark Seng expects road-going cars to continue getting older. Why? Manufacturers continue improving the build-quality of new vehicles, and consumers seem more willing to maintain them.
“Quality of new vehicles continues to be a key driver of the rising average vehicle age over time,” he explains.
The new-car market also seems to have peaked this year. Reduced interest in new vehicle sales should create an acceleration beyond its traditional rate, just as it did in the early days of the recession. Seng anticipates vehicles aged 16 years or older to grow 30 percent to 81 million units by 2021. He also expects over 20 million registered to vehicles to be a quarter-century old in roughly five years.
That’s 20 million cars and trucks eligible for historic plates by 2021.
With more cars on the road getting older by the minute, there is money to be made for anyone in the parts replacement, repair, or automotive service industries. AutoZone has seen shares of its stock nearly double in the last three years and servicing centers are frequently the most profitable portion of an automotive dealership.
“Increasing numbers of vehicles on the road builds a new business pipeline for the aftermarket,” Seng said. “A larger fleet means more vehicles that will need repair work and service in the future.”
This story first appeared on thetruthaboutcars.com