It is not just you—Americans are indeed holding on longer to their cars.
A recent report from S&P Global Mobility found the average age of cars and light trucks in the United States has risen to record 12.6 years in 2024, up by two months over 2023.
While this trend has not hurt the sales of new-vehicles, analysis believe this offers business opportunities for companies in the aftermarket and vehicle service sector as repair opportunities are expected to grow alongside vehicle age.
“With average age growth, more vehicles are entering the prime range for aftermarket service, typically from 6 to 14 years of age,” said Todd Campau, aftermarket practice lead at S&P Global Mobility, in a statement with the report. “With more than 110 million vehicles in that sweet spot—reflecting nearly 38 percent of the fleet on the road—we expect continued growth in the volume of vehicles in that age range to rise to an estimated 40 percent through 2028.”
Exchange Rate of New, Old Cars
Vehicle scrappage rates—the measure of vehicles exiting the active population—continues to hold steady at 4.6 percent at the beginning of this year, up just a tenth of a percentage point from January 2023.
Since 2020, S&P Global Mobility found more than 27 million passenger cars exited the U.S. vehicle population, while just over 13 million new passenger cars were registered. At the same time, over 26 million light trucks (including utilities) were scrapped and nearly 45 million were registered.
“Consumers have continued to demonstrate a preference for utility vehicles and manufacturers have adjusted their portfolio accordingly, which continues to reshape the composition of the fleet of vehicles in operation in the market,” said Campau.
286 Million on the Road
The vehicle fleet surged to 286 million vehicles in operation (VIO) in January, up two million over 2023, but the distribution of vehicles by age is changing.
Vehicles under the age of six accounted for 98 million vehicles in 2019, or about 35 percent of VIO. Today, they represent less than 90 million vehicles and are not expected to reach that threshold again until 2028 when they will represent about 30 percent of VIO, according to S&P Global Mobility estimates.
Analysis believe this is driven by the impact of COVID and subsequent supply chain shortages that disrupted vehicle supply and registrations that followed historically high volumes in 2015-2019.
As a result, the primary driver of VIO growth will be vehicles in the aftermarket ‘sweet spot’— vehicles 6-14 years of age are expected to represent about 70 percent or more of VIO for the next five years, which will serve as a tailwind to aftermarket service opportunities.
Looking at the EV Market
As for electric vehicles (EVs), they increased to 3.2 million in operation at the start of the year and by about 52 percent compared with 2022.
While the rate of EV growth has been slower than some automakers had anticipated, there is potential for the average age of EVs to rise in the short term as consumer adoption slows, according to Campau. The average age of EVs in the U.S. is 3.5 years and has been holding largely steady since 2019 with new registrations representing a large share of overall EV VIO.
“We started to see headwinds in EV sales growth in late 2023, and though there will be some challenges on the road to EV adoption that could drive EV average age up, we still expect significant growth in share of electric vehicles in operation over the next decade,” said Campau.