In 2002, George W. Bush was still president, Tiger Woods became the third golfer to win The Masters two years in a row, and many Americans bought the car they are still driving today.
New Polk data released this week found that the average age of all vehicles on the road today has hit an all-time high of 11.4 years, up from 11.2 last year. Polk, which expects this trend to continue, reviewed more than 247 million U.S. cars and light-truck registrations for the analysis.
The company also discovered that the volume of 6- to 11-year-old cars is declining, and will continue to do so by more than 20%, while the 12-years-and-up segment should grow by at least 40% the next five years.
This uptick in vehicle age can only have a positive impact in the auto industry.
These cars are going to need to be replaced, most likely sooner than later, so that will push new-car sales even higher. As Black Book has indicated that roughly 60% of all new-car sales include a trade-in that’s often one of these older vehicles, that will affect used-car supply and, inevitably, used-car sales.
Of course, all of the above means good news for auto lenders because a great number of those sales will need to be leased or financed.
