The Average Vehicle Age in America

Written by |
Advertisement

Thanks to technology, today’s cars don’t show their age like they used to, says money expert Clark Howard.

“Cars just keep getting better, and better, and better,” he says. “Today, because of tremendous improvements in technology and intense competition, the quality of cars is so, so, so much better.”

The latest research from S&P Global Mobility, an automotive data services company, confirms that vehicles on U.S. roads today are older than they’ve ever been.

How Old Is the Average Car on U.S. Roads?

The average age of cars and light trucks on American roads rose to a new record of 12.5 years in 2023, according to the report. That represents more than a three-month increase in age from the previous year.

The research highlights several factors over the past year that have led to an increase in the average vehicle age in the U.S.:

  • Deficiencies in the marketplace: Supply constraints in the vehicle market contributed to scarcity in new vehicle inventory.
  • Inflationary pressures: Higher interest rates due to inflation also contributed to weakening vehicle demand in the latter half of 2022.
  • Slower sales: Last year saw an 8% decline in U.S. retail and fleet sales of new light vehicles, which went from 14.6 million units sold in 2021 to a decade-low of 13.9 million units in 2022.

Here’s a snapshot of the average age of passenger cars (13.6 years), light cars and trucks (11.8 years) and a combination of the two.

Average age of U..S. vehicle

Screenshot via spglobal.com

Will People Continue To Keep Vehicles Longer?

With new vehicle inventories now increasing, projections reflect that average age growth will likely curve at some point.

“While pressure will remain on average age in 2023, we expect the curve to begin to flatten this year as we look toward returning to historical norms for new vehicle sales in 2024,” Todd Campau, associate director of aftermarket solutions for S&P Global Mobility, says in the report.

Looking several years ahead, the report forecasts that vehicles that are older than six years will make up 74% of cars in 2028. “These vehicles drive the most repair opportunities, and should serve as a positive trend for the independent aftermarket,” the report says.

Advertisement

The Financial Benefits of Keeping Your Car Longer

When you look at your overall budget, reducing your vehicle expenses is one of the best ways you can save money over the long haul.

“The one area of your budget that you can have the greatest impact over your long-term spending is what you’re paying for your wheels. Not just what they cost, but the real damage to your wallet comes from cycling through vehicles,” Clark explains.

Clark says most of a car’s depreciation happens in the first few years, so keeping a vehicle for about a decade is “phenomenal for your long-term financial health.”

Consider Clark’s 4-and-4 Rule

If you want to reduce the cost of transportation and still have a vehicle with modern safety features Clark has a tip for you:

“It’s the four-year cycle: Buy a four-year-old vehicle every four years. The economics equate over time to being very similar to buying a new vehicle you keep for 10 or more years.”

Not only will a four-year-old vehicle contain a majority of the modern safety features, but you’ll avoid much of the depreciation that occurs in the first couple of years.

“So follow the four-and-four rule,” Clark says, “Buy four-year-old vehicles that you keep for four years.”

Want more money-saving insights on the vehicle industry? Read Clark’s prediction on when car prices will drop.

Advertisement