According to a survey from S&P Global, the average age of vehicles and light-duty trucks that travel on American roads has risen to 12.5 years. This development coincides with families continuing to feel the effects of congested supply chains and high inflation.
The financial analytics company observed that 2023 will be the sixth year in a row with rising average vehicle ages. The three-month increase between 2022 and 2023 was the highest year-over-year increase since the recession that hit the US between 2008 and 2009 when consumers similarly cut down on spending in reaction to the financial crisis.
“We anticipated that the fleet’s convergence of circumstances will push the average vehicle age even higher starting in 2021. But when interest rates and inflation started to have an impact, the pressure increased in the second half of 2022,” according to Todd Campau, associate director of aftermarket solutions at S&P Global Mobility. “While the average age will continue to see pressure in 2023, we anticipate the curve to start flattening this year as we prepare to return to historical averages for sales of new vehicles in 2024.”
Currently, there are over 284 million motor vehicles on American roads; but, as light-duty trucks continue to gain popularity, the number of passenger vehicles will decrease below 100 million for what will be the first time in almost five decades. The number of vehicles between the ages of six and fourteen is expected to rise by 10 million over the course of the next five years, which is expected to benefit businesses in the aftermarket repair industry.
S&P Global attributes the larger average vehicle age during 2022 to “supply constraints resulting in the shortage of new vehicle inventories” in the first part of the year, which was followed by “a slower demand as interest rates along with inflation decreased consumer demand” in the second half of the year.
Government-imposed lockdowns in addition to public health regulations during the previous three years encouraged erratic supply chain shocks, which fueled inflation in many nations. Research by the Federal Reserve Bank of St. Louis found that the industries most severely affected by foreign bottleneck exposure, which included automobile production, textiles, and basic metals, also experienced the most acute inflationary pressures.