IHS Automotive announced that the combined average age of all light vehicles on the road in the U.S. has climbed slightly to 11.5 years, based on a snapshot of vehicles in operation (VIO) taken on January 1st of this year.
Registrations for light VIO in the U.S. also reached a record level of 257,900,000. That’s an increase of more than 5.3 million (2.1 percent) since last year and the highest annual increase the auto industry has seen in the U.S. since IHS began tracking VIO growth. New vehicle registrations also outpaced scrappage by more than 42 percent – the highest rate seen since the statistic has been tracked, according to the analysis. Scrappage is defined by a vehicle being taken out of the fleet and no longer in use.
Average age for both passenger cars and light trucks increased just slightly in 2015, and both now stand at 11.5 years.
“As long as we have tracked average age, it has gradually risen over time due to the increasing quality of automobiles,” said Mark Seng, global aftermarket practice leader at IHS Automotive. “For the five to six years following the recession, however, average age increased about five times its traditional rate, which we attribute to the nearly 40 percent drop in new vehicle sales in 2008-2009. We’re now seeing average age begin to plateau and return to its traditional rate of increase as consumers have recovered from the Great Recession and have begun buying new vehicles again.”
Helping age the fleet is the fact that consumers are holding on to their vehicles longer than ever before. As of Q1 2015, the average length of ownership for a new vehicle is 77.8 months, according to IHS analysis, an increase of nearly 26 months since Q1 2006. For used vehicles, it is 63 months, an increase of just over 25 months (since Q1 2006).
Looking ahead, IHS forecasts that average age is likely to hit 11.6 years in 2016 but not reach 11.7 until 2018. The rate of growth is slowing as compared to 2008-2013 due to the recovery in new vehicle sales. IHS Automotive has expected this and has been preparing customers and industry leaders in the aftermarket to respond to this slowdown in growth.
The number of vehicles scrapped in 2014 declined slightly from 2013, with just over 11 million light vehicles scrapped during the 12-month time frame analyzed by IHS Automotive, or 4.4 percent of the fleet. In comparison, a record high of more than 14 million vehicles were scrapped in 2012.