Americans Holding onto New Cars Longer
Drivers in the U.S. are keeping new cars for nearly six years, which is the longest time period since 2006, according to a new study by Polk. When Polk began surveying new-car owners in 2003, people were keeping new vehicles for about four years, according to the Atlanta Journal Constitution. Now, Polk reports that buyers are waiting for an average of 71.4 months to sell or trade their new vehicles.
MarketWatch reports that the aging new-car fleet in the U.S. is a result of factors like a weak job market, increased use of long-term financing and improved vehicle quality. And analysts expect the trend to continue.
The Sacramento Bee notes, “Polk analysts don’t anticipate new vehicles sales will reach pre-downturn levels of 16 million units until 2015 and Polk does not expect to see an immediate decline in the length of ownership trend over the next few years.”
Most analysts agree that the increased time new-car buyers are holding onto their vehicles is one more factor in rising used car prices. As we’ve previously reported, it’s getting harder to get a great deal on used cars. Used car owners are feeling the pinch as well. The average age of cars and trucks currently being operated in the U.S. is 10.8 years.
So what does this mean for consumers? First, if you’re looking to sell or trade your car, you’re in luck. “A midsize used car under five years old is projected to sell at an average price of $11,850 this year, according to the (National Automobile Dealers Association),” reports The Wall Street Journal. “Two years ago, the same car would have sold for $10,325.”
If you’re shopping for a used car, your best bet is to buy sooner rather than later. “Used-car shoppers may want to consider making a purchase sooner rather than later because prices aren’t expected to come down any time soon,” writes the Wall Street Journal.
However, used car buyers have a few reasons to be optimistic. Automakers have been improving the reliability and quality of their vehicles, so buyers can be more confident that the used car they’re paying money for will hold up. “The newfound emphasis on quality means fewer problems for owners,” reports the Detroit Free Press. “It also means more options for buyers, who can buy a car from Detroit or South Korea and know it will hold up like a vehicle from Japan.”
Shopping for a used or new car? Check out the U.S. News rankings of this year's best cars. Then, look for a great deal on a new car by checking out this month’s best car deals. You can also skip negotiating with a dealer by using our Best Price Program. Also, be sure to follow us on Twitter and Facebook.