The Common American Automotive is Older than Ever Earlier than

In 2022, the typical age of a automobile on the street within the U.S. surpassed 12 years—a report excessive. The rising age of American vehicles is a longtime pattern—the average age of automobiles in operation within the U.S. has grown by about 45% since 1995—that gained momentum within the final 5 years attributable to a constellation of adjustments inside the automotive business starting from a decline in stock to rising costs for brand spanking new and used automobiles.

The Normal collected information from official authorities and numerous non-public sources to know how the age of automobiles working on U.S. roadways has modified. Sources embrace the Bureau of Transportation Statistics, IHS Markit, Bureau of Economic Analysis, Organization for Economic Co-operation and Development, and the Bureau of Labor Statistics.

Business analysts and the dealerships servicing lots of our vehicles and SUVs credit score technical developments for our longer relationships with automobiles. Suspensions are extra rugged in the present day, whereas engines are extra fuel-efficient and might last more than ever: Reaching 200,000 miles in your odometer with out main points is no longer unheard of. However new automobiles have additionally elevated in worth as producers have produced fewer fashions yearly since 2017.

In 2018, the automotive business noticed a shift from a U.S. market saturated with new automobiles. Automotive gross sales had been slumping as a result of Nice Recession, however People rising from it took benefit of the low-interest charges set by the Fed to take out loans. New automotive gross sales, in flip, soared.

An growing older automobile’s proprietor may incur extra upkeep prices because the automobile racks up miles on the odometer. However ultimately, the automotive mortgage is paid off and maintenance, insurance coverage, and gas change into the principle prices of proudly owning the automobile. Since a automotive sometimes loses worth because it ages, an older automobile additionally tends to be cheaper to insure than a brand new automotive. These elements could make holding onto a paid-off, growing older automobile—slightly than buying and selling up for a brand new journey—a stable proposition as of late for on a regular basis transportation.

Plummeting automobile affordability for the reason that onset of the pandemic threatens so as to add yet one more issue to extending automobile possession. The largest spikes in latest historical past for the price of new and used automobiles jumpstarted in 2021, as pc chip shortages and provide chain troubles plagued producers already hit exhausting by COVID-19 disruptions. Hovering demand and decrease provide pushed costs to unaffordable ranges for a lot of potential consumers.

Standard mainstream automobiles such because the Toyota RAV4 and Honda CR-V, which had been reasonably priced as just lately as 2019, are actually out of attain for the typical shopper, in line with a latest evaluation by the used automobile search engine iSeeCars.

The average monthly car payment for a new vehicle hit an all-time excessive of $648 earlier this 12 months, in line with Edmunds. Whereas a five-year automobile mortgage was once widespread, shoppers are extra generally signing six- and seven-year notes for brand spanking new automobiles. Learn on to study extra about how the size of automotive possession has modified within the U.S. over the previous couple of a long time.


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Cars are actually sometimes on the street for greater than 12 years

The typical age of automobiles on U.S. roads elevated on the quickest clip recorded through the begin of the twenty first century. It’s maintained a gradual upward pattern via the 2010s. The sudden improve in common possession spans for automobiles is essentially attributed to the 2008 monetary disaster and ensuing Nice Recession when many American shoppers held on to what they’d and delayed main purchases.


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The value for brand spanking new cars has elevated greater than 17% since 2020

As the typical age of automobiles on American roadways gained steadily over the past 5 years, vehicle costs skyrocketed over the past 24 months.

When the COVID-19 pandemic started, many U.S. auto dealership showrooms got here to a standstill as nervous prospects stayed away and social distancing tips pressured many to quickly shut— at the same time as their upkeep outlets remained open as important companies. Dealership gross sales groups who didn’t have strong on-line buying and supply methods in place rapidly hit the fuel on streamlining on-line purchasing and socially distant supply processes just like that of their rising opponents like Carvana.

Line chart displaying vehicles accessible on the market was lowering quickly even earlier than the pandemic.

Customers have observed an ever-dwindling number of new automobiles to select from on dealership tons as stock inventory has plummeted since 2000. Producers noticed a listing dip after the onset of the Nice Recession however had steadily replenished inventories within the mid-2010s to pre-recession ranges. 

Home auto inventories are at their lowest since information assortment started in 1993. Demand for brand spanking new automobiles fell after 2018 however shot again up in 2021 simply as automakers had been struggling to ship new models to dealerships.


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Line chart displaying that new passenger automotive registrations are additionally trending downward.

New automobiles on the street are a boon for the automotive service business, which positive factors a bigger market of potential prospects with every new Toyota Corolla and Ford Bronco. Stock crunches on dealership tons that started in 2021 have given approach to rising costs, fewer new automobile gross sales, and fewer passenger vehicles being registered in every state.

Written by: Dom DiFurio