The cars people drive are getting older and older. According to IHS Markit, a research firm, the average age of cars, light duty trucks and SUV’s currently on the road in the US has risen to 12.1 years old.
The report explains COVID-19 and its impact across the US caused a drastic reduction in new vehicle sales. Many dealerships had to adjust to pandemic protocols modifying sales processes and deliveries and adjusting to social distancing guidelines in showrooms to make customers feel comfortable.
The report also documents new car sales are being hindered by a global semiconductor chip shortage as a result of the pandemic. According to Autotrader, “Automakers have been unable to source enough computer chips to finish assembling vehicles, which has led to a nearly depleted inventory of some popular models.”
COVID isn’t entirely to blame. Cars are lasting longer. Thanks to improvements in auto reliability and safety technology cars are running beyond the standard 100,000 miles.
Low inventory, less driving and greater vehicle dependability have kept many car owners behind the wheel in their current vehicles. “If a driver paid good money for a vehicle they are inclined to keep it a little longer,” says Ellsworth Buck, Vice President of GreatFlorida Insurance, Florida’s top independent auto insurance company.
Car owners not content to stay in their current vehicle or in the market for another car are turning to the used-car market and experiencing sticker shock.
The most recent Consumer Price Index report from the US Department of Labor shows the highest overall annual inflation rate in 13 years. The index reports used-car prices climbing a staggering 29.7 percent over the past 12 months.