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May - June 2021
Average age of cars rises to 12.1 years: Study ‘Increase in average age will further drive vehicle maintenance opportuniƟes from an increasingly aged vehicle fleet.’ The average age of cars and light duty trucks in the United States has risen to 12.1 years this year, according to new research from IHS Markit. The average age has increased by nearly two months during 2020 and was elevated by the COVID-19 pandemic, the study found, adding that the increase in average age will “further drive vehicle maintenance opportuni es from an increasingly aged vehicle fleet.” The pandemic caused a “dras c reduc on” in new vehicle sales as well as a sudden increase in vehicle scrappage, which was a catalyst for increased velocity in the growth of the average age of light vehicles, IHS Markit said. But this trend is expected to be short-lived with 2021 seeing a return of new vehicle registra ons and increased ac vity in used registra ons. “2020 was a radical departure from the norm and challenged assump ons about how vehicle owners use their vehicles and accumulate miles,” said Todd Campau, associate director of a ermarket solu ons at IHS Markit. “From a vehicle fleet perspec ve, one of the real surprises was the number of vehicles that suddenly exited the ac ve popula on.” According to the analysis, the rate and mix of vehicles leaving the popula on point to the possibility that the volume may be inflated due to a larger percentage of vehicles that may not have been registered due to lags in state requirements for registra on renewals, more vehicles being put into storage due to COVID-19 restric ons in many loca ons, and work from home ini a ves, the study found. While new vehicle sales proved resilient in 2020, the most significant impacts to vehicles in opera on from the pandemic were felt in the rate of vehicle scrappage and vehicle miles traveled. Scrappage, the measure of vehicles exi ng the ac ve popula on, saw its highest volume in two decades at over 15 million units, and second highest rate at 5.6 percent of vehicles in opera on. Vehicle miles traveled declined year over year by over 13 percent in 2020 due to lockdowns and work from home policies. “Typically, an increase in scrappage rate would be expected to be a headwind to average age, but coupled with the lower new vehicle sales and reduced vehicle miles traveled, the combined impact proved to be a tailwind,” IHS Markit said. Continued on Page 35
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