Americans Hold onto Cars Longer Amid Lingering Supply Chain Disruptions

Americans Hold onto Cars Longer Amid Lingering Supply Chain Disruptions
Americans Hold onto Cars Longer Amid Lingering Supply Chain Disruptions. Credit | Getty images

United States – New data show that those Americans who own a car are increasingly reluctant to let it go as new data shows that while supply chain disruptions due to the COVID pandemic are increasingly fading, severe shortages of vehicles remain at the dealerships.

Record Age for U.S. Vehicles

This year, it was 12 years of age for U.S. cars and light trucks, setting a record. Specifically, automakers anticipate that Q4 demand will persist for six years from independently arranged and forecasted by S&P Global Mobility on Wednesday and prolonged to two months less than the previous estimated 2023, as reported by Reuters.

However, S&P also noted that although the increase in the average age of registered new cars may not have been as bad as in earlier years, percentages indicate that car owners with cars six to 14 years or older would account for 70 percent of the overall automobiles in use in the next five years.

“This continues to improve business opportunities for companies in the aftermarket and vehicle service sector in the U.S., as repair opportunities are expected to grow alongside vehicle age,” S&P said in the report.

Shifts in Vehicle Ownership Dynamics

Visual Representation. Credit | Shutterstock

The average age of battery-powered vehicles is also expected to increase slightly in the next four years or so after hovering at around three years. As of 2019, new cars contributed a large chunk of those in circulation five years later.

Challenges and Opportunities Ahead

This has, however, been compounded by high interest rates aimed to subdue adamant inflation, which has dampened consumer appetite for expensive electric vehicles (EVs). This segment is generally more expensive than traditional gas-guzzling ones, as reported by Reuters.

Visual Representation of EV Car. Credit | Getty images

“We started to see headwinds in EV sales growth in late 2023, and though there will be some challenges on the road to EV adoption that could drive EV average age up, we still expect significant growth in the share of electric vehicles in operation over the next decade,” Todd Campau, aftermarket practice lead at S&P Global Mobility, said in the report.