Our eyes are often drawn to those snazzy new cars driving next to us on the highway, but take a wider look around and you'll likely find a sea of much older vehicles taking up the bulk of the road. And these days, that majority is getting even older.
Vehicle registration data released by S&P Global Mobility Wednesday shows the average age of cars and light trucks in the U.S. hit a record high of 12.6 years this year. That's up by about two months from the 2023 record, which had increased by three months from the year before and had 2 million fewer vehicles on the roads compared to this year.
For just cars, the average age is now 14 years, compared to around 11.5 years 10 years ago, according to the automotive data company.
But S&P Global Mobility says the increases in average age are showing signs of slowing. It points to new registrations now beginning to normalize after just over 13 million new passenger cars were registered since 2020, compared to more than 27 million exiting the 286 million overall vehicle population in the U.S.
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That may be a sign of a settling of the supply-chain production issues that plagued the pandemic, which had driven the price of used cars up. Now with those obstacles removed and auto worker strikes calming, new cars are becoming available again.
Yet even with new car prices down 3.5% from January 2023, according to Kelley Blue Book analysis, many might still gravitate toward buying used, as consumers are aiming to spend less overall. Plus, Consumer Price Index data shows car insurance is up more than 20% since last year, and it's cheaper to insure an older vehicle.
"While new cars are back, they’re still very expensive, and for a lot of people, used cars are what they can afford," said Mac Clouse, a professor of finance at the University of Denver.
S&P Global Mobility says that's good news for the country's aftermarket and vehicle service industries, as more aging cars means better business opportunities for repair shops.
Looking ahead, the data company says the primary sector of growth within vehicles in operation will be those aged 6 to 14 years of age. That group is expected to represent about 70% or more of the U.S. operating fleet for the next five years, the company said.
