Cars are getting long in the tooth.
Driving the news: Average age of vehicles on the road hit record high for fifth consecutive year, reaching 12.2 years in 2022, annual report says report published today by S&P Global Mobility.
Why is this important: Americans are adjusting to the confluence of price spikes, rising borrowing rates and vehicle shortages.
- “People are keeping their vehicles longer and fixing them,” Michelle Krebs, analyst at Autotrader, tells Axios. “We are seeing a lot more service business.”
By the numbers: The average age of vehicles has been increasing for decades, from 9.6 years in 2002 to 11.1 years in 2012.
- The figure comes from the annual “scrap rate” – the share of vehicles that were scrapped in a given year. That figure is at an all-time low in two decades of 4.2% in 2022, according to S&P Global Mobility.
The big picture: With the shortage of new vehicles due to the global shortage of semiconductor chips, prices have skyrocketed for both new and used cars, giving people more incentive to hang on to their commutes.
- The average price of new vehicles rose 13.2% in April from a year earlier, while the average price of used cars and trucks rose 22.7%, according to the Price Index at the federal government’s monthly consumption. report.
To note: Rising interest rates make it harder for some people to negotiate.
- The average new car buyer OK to an estimated monthly payment of $648 on a 70.2-month loan in April, up $68 from April 2021, according to Edmunds.
💭 Nathan’s thought bubble: I have a 16 year old car that has needed several expensive repairs over the past few years, but fixing it is always cheaper than buying a new car.
Disclosure: Autotrader is owned by Cox Enterprises, an investor in Axios.