As we reported last month, the average age of cars on the road today is 11 years, according to the research firm R.L. Polk. Now a new Polk study takes a look at new car ownership length and finds that Americans are holding on to their vehicles nearly six years, which is an all-time high.
The reasons for such a lengthy new car ownership cycle aren’t too hard to fathom, and Polk lays them out for us. High on the list is the still-weak job market and relatively high unemployment rates that translate into conservative consumer spending, especially on a high-ticket purchase like a car. If you don’t have a job, can’t find a job, or are worried you’ll lose your job, you’re not likely to plunk down money for a brand-new car.
Affordability is another reason for the longer ownership periods for new cars. If you do have a job, and really need a car, the longer-term financing offered by automakers is a reasonable choice for being able to swing the purchase. The appeal of affordable payments on a six years or 72 months purchase is obviously a factor.
But let’s not forget that cars and light trucks today are increasingly more durable. This is another reason new vehicle buyers feel more comfortable holding on to them for extended periods.
A final factor cited by Polk is the increased warranties several manufacturers now offer. While not mentioned by name in the study findings, Hyundai and Kia are prime examples of automakers with attractive warranty coverage, lasting for 10 years or 100,000 miles. Hyundai even markets their coverage as “America’s best warranty.”
2012 Chevrolet Equinox
What this means for consumers
Maybe you think your family vehicle is running out of its useful life, but it could very well be that all it really needs is a repair of certain parts. True, the cost of replacing an engine or a transmission may seem expensive, but if that’s all your car needs, it’s a lot less costly than going out and buying new.
If you are looking at a new-vehicle purchase or lease, be sure you look for the type of vehicle that suits 90 percent of your needs. You may want a mid-size SUV or a more powerful engine, but do you really need it when a compact car such as the 2012 Hyundai Elantra or crossover like the 2012 Chevrolet Equinox may be more than adequate? Look for the best deal you can get. Weigh and balance all your options relative to purchase or lease and length of contract. How good is the warranty? Where does your proposed new vehicle purchase fit in durability studies?