SOUTHFIELD, Mich. — Light vehicles in the U.S. are getting older and retaining more value, according to a new report from S&P Global Mobility.
The average age of light vehicles in operation in the U.S. is up for a fifth straight year, S&P Global Mobility said, rising nearly 2% over 2021 to 12.2 years.
S&P Global said in a statement that the increase was driven by the global microchip shortage and supply chain issues causing a "constrained supply of new cars and light trucks, amid a strong demand for personal transportation."
Todd Campau, automotive aftermarket practice lead for S&P Global, told Tire Business sister publication Automotive News that supply shortages are causing owners to either keep their vehicles longer or purchase used ones.
"People do value their vehicles; people do still feel the need to have a vehicle available to them, maybe even more coming out of the pandemic, so that's caused the vehicle fleet just to grow a little bit," Campau said.
"And because the new-vehicle sales haven't been available, it's been growing from within really from vehicles that have been on the road, and they're just staying available longer."
The research shows the average age of vehicles has been increasing since 2011, highlighting a trend in popularity of older and higher-mileage vehicles. Data from a Cox Automotive analysis shows that sales of high-mileage vehicles grew 7% in the first quarter of 2022.
Previously, vehicles with over 150,000 miles were often deemed unqualified for retail sale and were instead sent to auction to be purchased by independent dealers.
The U.S. vehicle fleet — which includes all light cars and trucks — increased by 3.5 million vehicles to a total of 283 million in 2022, according to S&P Global, which attributed the increase to a continued decline in vehicle scrappage and a flux in demand for used vehicles.
Vehicle miles driven also returned to pre-pandemic levels, according to the study, "increasing by more than 10% in 2021 as lockdowns eased and people returned to work and leisure travel." The average in 2021 was 12,300 miles in 2021.
Electric vehicles, however, have seen a decrease in their average life from last year. S&P Global said the number of battery-electric vehicles in operation increased nearly 40% in 2021 to 1.44 million, but the average age fell to 3.8 years from 3.9 years in 2020.
"It's a function of the fact that right now, the share of new EVs being sold each year is such a large share of the overall [EV] population," Campau said.
S&P Global predicted in the study that the issues surrounding supply and microchip shortages will continue to increase the average age of light vehicles through at least 2023.
"I think there's definitely going to be upward pressure on average age through probably 2024, maybe even '25," Campau said. "Then I think it will level off once the new-vehicle supply starts to catch up with demand. There's even a potential, I think, that we could see average age maybe even come down slightly ... when that pent-up demand for new vehicles is released."