Chart of the Day: American Cars Are Getting Older

Americans are keeping their cars longer than ever before. In 2007, the average age of cars on the road was a little over 10 years. Today it’s a little over 11 years.

The proximate cause of this is the Great Recession. If you don’t have enough money to buy a new car, you’re going to keep your car longer. But I wonder how much is the result of cars being more reliable than in the past? My car is nearly 13 years old, and it basically still runs fine. A couple of decades ago, even a Toyota would have been getting a little long in the tooth at that age.

This mainly matters because it has an impact on what happens over the next few years as the recovery (hopefully) picks up steam. New car sales are a prime driver of economic recoveries, and if the aging of the US fleet is producing pent-up demand for new cars, this will help the economy. But if consumers are keeping their cars a little longer because they still run fine, then there might not be as much pent-up demand as we think.

We’ll have to wait and see, because current data is inconclusive. Automakers had a pretty good year in 2013, but they finished up with a tepid December. And the existing fleet continued to age in 2013 despite those strong sales. Considering the higher reliability of modern cars and the weakness of the recovery, I wouldn’t be surprised if car sales in 2014 are OK but not great, and the fleet continues to age a bit.


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