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Americans In No Hurry To Retire Clunkers, As Sales Falter

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It's the cycle of life. As we buy new vehicles, we trade others in; frugal used-car owners buy those, and sell their older vehicles. And in turn, a tired heap of a vehicle is retired.

Trouble is, we're not retiring as many vehicles as we used to.

The average vehicle in the U.S. is now about ten years old (9.9 actually), and probably, if it's the typical vehicle, nowhere near retirement age. Back in 1990, the median age of U.S. vehicles was just 6.5 years, and in pre-recession 2007 it was still around nine years.

The good news for the industry is that, as of late, a few more vehicles are being brought to the junkyard, and it appears Americans have given up trying to repair some of their most worn-out beaters. According to Experian Automotive, vehicle scrappage significantly increased in the fourth quarter of 2010 compared to the quarter before, when Cash for Clunkers had driven many clunkers to an early retirement.

The bad news is that looking at these vehicle retirements over a slightly wider timeframe, we're still not making much room for a significant spike in new-vehicle sales. Yes, we've seen some encouraging results over the past several months, but auto sales are still deeply depressed.

Over the last half of 2010, about 5.7 million new vehicles were sold, while roughly the same amount were scrapped, so the number of currently registered vehicles in the U.S. has remained relatively stable, at about 240 million cars and light trucks (the U.S. is a mature market, so that total isn't going to change significantly). Of those that stayed in circulation, about 17.5 million used vehicles changed owners during that time.

In 2010, 5.3 percent of cars and 3.5 percent of trucks were retired from duty. That's also a fraction of what we were scrapping in strong economic times. Experian also points out that total vehicles from the 1983 to 1992 model years saw a decrease of more than eight percent just in the last half of 2010. The early 1990s were a period when most automakers made huge improvements in vehicle reliability and longevity.

As we've reported, the best we can hope for in 2011 is a modest sales recovery, perhaps reaching the 13-million mark this year.

In some respects, it's a chicken-or-the-egg issue. Which comes first, the urge to get a new vehicle or the need to get rid of the old clunker? Are you ready to retire a vehicle and replace it with a new one, or keep holding on?

[Experian Automotive]

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Comments (13)
  1. I find it so hard to believe that the US average could be so low. I'm not from the US, but I go there regularly, and everyone always seems to be driving brand new cars - most on the road seem to be less than 5 years old.
     
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  2. Sorry - correction to my post: meant to say that I can't believe the US average is so HIGH.
     
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  3. This doesn't surprise me at all. Tough economic times combined with much better vehicle durability = strong incentive to keep your old car. My 1999 Jeep Cherokee just crossed 233,000 miles and it doesn't even burn oil. I have no reason to trade it in for a few hundred dollars credit. And it's still more fun to drive than most of the new trucks I've driven.
     
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  4. have no imtemtion to get a new vehicle. last bought new in '06 still have that car as well as the one bought in '97, the 91 I inherited, (Bought new by my father) and the collector iron I own from the 60s and 70s. All these cars are maintained and paid off. No need to buy new.
     
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  5. I am not surprised. We have three vehicles, the newest of which is 10 years old. With two of them capable of 30+mpg, short commutes, there is no real pressure to visit the sales lot. OK, a little pressure as VW is about the quit making TDI sportwagens and there is no other vehicle like it.
     
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  6. My Chevy Prizm is 11 years old, paid for, and gets 38mpg on long trips at 70 mph. Why would I want to go in debt to get something newer that is not any better and will cost a lot more to insure. My 1997 Dodge Caravan is good as new and until a minivan gets 30 mpg, I'm very happy with it. Again, paid for and insurance is cheap.
     
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  7. No sense buying new, I buy year old with low mileage, jsut as good, lasts just as long with little depreciation.
     
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  8. 10 yrs ago I was on the buy-or-lease go-round (I bought most of those in the 'Fargo' showroom in Mpls--it looks just like that). In 05 times were good, new Denali, used F350, 20K hot 08 Stang last yr, and I have three hs/college kids with cars.
    All others are well over 100K but have been well maintained. No need for new. Had a new Acadia while the Denali was being fixed, didn't get any better mileage and much smaller. Obama has cranked the price of Suburbans!!!!!!!!
     
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  9. Yes, blame it on Obama - the guy has cut taxes three times already (thousands each year for an avg family), saved GM, made them bring a lot of production from China but he's still the dirty "communist" :-) I have no true need for a new car but I am waiting for the LEAF as gas prices keep climbing and Exxon is growing their untaxed profits at 40%/year.
     
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  10. JKD, I haven't seen any tax savings on my end...I wonder if they went to the wrong address. You say he saved GM. GM almost closed down because of their inability to borrow money during the meltdown that was caused by the financial mess (which congress was responsible to oversee).
    Instead of loaning the money to GM and Chrysler, they were forced to declare bankruptcy first. Which basically eliminated the ownership from the investors and bond holders took a loss. So who ended up owning the companies now? The Government and the UAW unions. If that is not wealth transfer, I am not sure what else is.
    By the way, GM is huge in China, how many of those cars are exported from here? Why can't American companies fully own their businesses in China? I don't see any push to change this. China is getting a quick education on manufactoring for free and developing their own local suppliers through these forced JVs.
    You want to buy a Leaf so that your spent dollars go back to Japan? How about waiting for the new electric Focus from Ford? Or buying one of the over 40 mpg American options?
     
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  11. China and the WTO is a joke - I agree. But I guess you must be unemployed since this year's 2% SS/medicare cut (adding up to close to $2K for an average income) doesn't affect you. Extending Bush era taxes (set to expire last year and no matter how reluctantly done) for another 2 years must be another mystery. The dude is more to the right than Nixon, Reagan, and Bush Sr. (all ultra leftist by today's standards) but he's a communist somehow :-) Please back up your "facts" with numbers. So far, most of the billions spent on TARP, the taxpayers got back with interest including GM and its recent stock offering. Oh, I don't care for any 40MPG+ options or other electric vaporware - F gas, man.
     
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  12. I would have to agree with JKD on this one. Gas blows, oil blows, coal blows, nuclear blows. Just because we have these options for energy doesn't make it moral or stable.
    Society is still catching up with technology, but we have to allow technology to continue flourishing. Electric cars will be at your local dealer soon, if they aren't already.
     
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  13. I want a new car, but no one makes anything I want anymore.
    Where's my Prelude SI? Wheres my 240? Heck, you cant even buy a Mitsu Eclipse with a stick anymore, unless you get the stripper model.
    I'll but a new car as soon as someone makes a nice coupe with a manual transmission that doesnt cost over 30K for the "privledge" of driving a stick.
     
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