Lengthier vehicle lifespans spurring more to buy pre-owned
It's a trend that's been evident over the past few centuries: People are living longer. So much so, many people are deciding to retire from their jobs later than they initially planned.
Increased life expectancy of a different variety is yielding changes in consumer behaviors as well, as a new poll indicates that individuals aren't going through the auto purchase process quite like they used to, thanks to cars holding up more effectively.
Longevity was the second-most cited factor in when motorists will next buy a vehicle, according to a recent survey conducted by AutoMD.com. At 23%, most pointed to price as having the biggest influence. However, in a not-too-distant second, 18% said how long their car was able to withstand wear and tear would have an impact, up from previous survey findings.
Length of ownership has risen by nearly two years since 2006
There's no denying that drivers are holding on to their automobiles for longer periods, thanks in part to cars being more resilient. The average length of ownership for a new vehicle – based on numbers reported by IHS Automotive last summer – is approximately 78 months. That's up from 52 months back in 2006. Meanwhile, for used vehicles, owners keep them for an average of 63 months, an increase from 38 months nine years prior.
The same goes for the average age of cars on the road. Last year, it was 11.5 years, a number that has consistently notched higher than the previous year, according to Mark Seng, Global Aftermarket Practice Leader at IHS.
"As long as we have tracked average age, it has gradually risen over time due to the increasing quality of automobiles," Seng explained. "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% drop in new-vehicle sales in 2008-2009."
The United States Department of Transportation has similar findings, revealing that the average age of all automobiles in 2014 – the latest year that data is available – was 11.4 years.
Nearly half say they'll go with pre-owned next time
It's because of this that pre-owned vehicle ownership is gaining traction. When asked the type of car respondents would next buy, 45% said they'd go with pre-owned, the AutoMD.com survey revealed, with new vehicles in a distant second at 24%.
"Clearly many consumers embrace the notion of a pre-owned vehicle as a viable primary vehicle, and are looking to keep them running for the long term," said Tracey Virtue, AutoMD.com Vice President.
More specifically, the 45% who intend to buy pre-owned the next time they're in the market say it will be for a vehicle that's between 2 and 10 years of age
Prices may also be persuading buyers to opt with pre-owned over new. New-car values have risen 2% in the past year or so, according to vehicle valuation firm Kelley Blue Book. The typical new car by today's standards costs $620 more than it did in April of last year.
Regardless of age, financing conditions make it one of the best times in recent memory to be the proud owner of a brand new – or used – car. Only 1% of auto loans in the first quarter of this year were seriously delinquent, based on data from credit agency TransUnion.
Who said getting old had to be hard?