We always try to run news stories that help people who are looking for a new car. According to a new study, consumers are buying new cars less often than they used to.
R.L. Polk & Co., an automotive industry research firm, tracks how long consumers hold onto their cars. “The average length of ownership of new vehicles continues to increase . . . Consumers are now holding onto a new vehicle, on average, for 63.9 months based on second quarter 2010 data, up 4.5 months from the same time last year,” Polk writes.
There are a number of reasons consumers are keeping their old cars and waiting to buy new ones. The economy is one. “Since the global economic meltdown and the devastating effect it had on the world's automakers in 2008, that average length of ownership has increased dramatically at a clip of more than 14 percent,” says Autoblog.
Kicking Tires agrees that the economy is behind the numbers but also adds that better-made cars that last longer also probably plays a role. Plus, they say, “The increasing frequency of 60- and 72-month car loans would contribute as well.”
Consumers hanging onto their cars longer not only affects new car sales. It also affects used car prices. “Used car prices have increased as consumers are holding onto their current vehicles longer,” writes Reuters. People holding onto their cars limits the pool of available used cars, which drives prices up. The opposite is true for new car prices. Reuters says that longer ownership periods have “been a weight on new car prices.” That’s because a shrinking pool of new car shoppers limits demand, which keeps prices down.
What does this mean to you? If you’re in the market for a new (or new-to-you) car, you may find that used car prices are higher than you expected. Shop new cars, however, and you may find that dealers are willing to negotiate, incentives are generous and you could end up saving some cash. If you’re shopping used cars, make sure you check out our used car listings. We’ve consolidated the used car listings from most major used car websites, so you can shop and compare used car prices all in one place.
For people planning on keeping their cars for the long haul, routine care and maintenance are key. To help, we’ve created an repairs section of our site. There, you can get information on how much repairs and maintenance to your car should cost, as well as a list of recommended mechanics. Just use the Find a Car tool on the upper right side of our site. Enter your car, and once you’re on your car’s page, click on the “Repairs” tab.
And, if you’ve held on to your car for the 63.9 months Polk says is average now and want a new one check out the U.S. News rankings of this year's best cars as well as this month's best car deals. Also, be sure to check us out on Twitter.