Gotta make the old jalopy run just a little bit longer.
Credit better quality – or blame a bad economy, if you prefer – what’s hard to disagree with is that Americans are keeping their cars longer, according to a new report by automotive research firm R.L. Polk.
The typical owner will hold onto their new car, truck or crossover for just less than six years, according to the report. For those who purchased a previously-owned vehicle, the typical length of ownership is just over four years. That works out to an average, for both new and used vehicles, of 57 months, a figure that has increased 23% since the third quarter of 2008.
On the downside, longer ownership cycles translate into fewer cars sold. The flipside is that this could be translating into a significant bubble of pent-up demand that could fuel a surge in sales over the next several years. Indeed, dealers suggest they’ve already begun seeing many buyers return to their showrooms in recent months as the economy has begun to improve.
Meanwhile, the trend towards longer ownership could also be great news for parts suppliers and those providing maintenance and repair services, suggested Mark Seng, global aftermarket practice leader at Polk.
“As the aftermarket prepares to service this aging vehicle population, this creates concerns about appropriate parts inventory,” he said.
Those with new vehicles had held onto those cars, trucks and crossovers an average of 71.4 months when measured during the third quarter of 2011. That was up from 56.3 months during the third quarter of 2008, and just 50.2 months during the same quarter in 2003, according to Polk.
On the used side, the average owner held their vehicle 49.9 months during the third quarter of 2011, up from 41.3 months during the same period three years earlier, and 33.1 months during the third quarter of 2003.
There is little doubt, the research firm noted, that motorists are holding onto vehicles longer due to the uncertain economy. But rising quality makes it possible to do so, the firm added. Other recent studies have found that vehicle reliability is at an all-time high.
(For more on the latest J.D. Power Vehicle Dependability Study, Click Here.)
Polk last month released a separate survey that revealed the typical vehicle on U.S. roads is now older than ever, at an average 10.8 years. (For more, Click Here.)
That presents a tremendous opportunity for boosting sales as the economy recovers, according to Seng, but the turnaround won’t be immediate, with the industry not likely to see a repeat of the previous decade’s record sales until at least 2015.
“Unemployment rates continue to be high, and we expect many consumers will suffer from the lingering effects of the downturn, further contributing to longer ownership trends,” he said.
The data also show that the longer motorists own a vehicle the more likely they are to change brands when they do come back to the market.