Here’s Why Americans Are Keeping Their Cars Longer than Ever

Here’s Why Americans Are Keeping Their Cars Longer than Ever

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By Beth Braverman

As cars get more reliable Americans are holding onto their vehicles for longer than ever before. The average age of cars and light trucks is now 11.5 years old, according to a new report from IHS Automotive.

In addition to better reliability, cars are getting older because Americans bought far fewer new cars in the years following the Great Recession, as concerns lingered about unemployment and the strength of the economy.

Even as consumers have started purchasing new vehicles again, they’re still holding onto their older ones. The average length of ownership of a new vehicle reached 6.5 years in the first quarter of 2015, more than two years longer than in 2006. The number of cars more than 12 years old continues to grow and is expected to increase 15 percent by 2020.

Related: The Incredible Disappearing American-Made Car

IHS predicts that the average age of vehicles will inch up slightly over the next few years, hitting 11.7 years in 2018.

The number of cars on the road hit a record 258 million, posting a 2.1 percent increase over last year, driven by the purchase of new cars. IHS expects that volume of cars less than 5 years old will increase by 24 percent over the next five years.

Consumer sales of autos were on pace to rise 4.2 percent this month, according to TrueCar, compared to July of 2014, thanks to increased demand, summer sales events and the growing popularity of premium brands.

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Chart of the Day: Dem Candidates Face Their Own Tax Plans

Senator Bernie Sanders, former Vice President Joe Biden and Senator Elizabeth Warren participate in the 2020 Democratic U.S. presidential debate in Houston
MIKE BLAKE/Reuters
By The Fiscal Times Staff

Democratic presidential candidates are proposing a variety of new taxes to pay for their preferred social programs. Bloomberg’s Laura Davison and Misyrlena Egkolfopoulou took a look at how the top four candidates would fare under their own tax proposals.

Quote of the Day: The Health Care Revolution That Wasn’t

Benis Arapovic/GraphicStock
By The Fiscal Times Staff

“The fact is very little medical care is shoppable. We become good shoppers when we are repeat shoppers. If you buy a new car every three years, you can become an informed shopper. There is no way to become an informed shopper for your appendix. You only get your appendix out once.”

— David Newman, former director of the Health Care Cost Institute, quoted in an article Thursday by Noam Levey of the Los Angeles Times. Levey says the “consumer revolution” in health care – in which patients shop around for the best prices, forcing doctors, hospitals and pharmaceutical firms to compete with lower prices – hasn’t materialized, but the higher deductibles that were part of the effort are very much in effect. “High-deductible health insurance was supposed to make American patients into smart shoppers,” Levey writes. “Instead, they got stuck with medical bills they can't afford.”

Congressional Report of the Day: The US Pays Nearly 4 Times More for Drugs

A pharmacist holds prescription painkiller OxyContin, 40mg pills, made by Purdue Pharma L.D.  at a local pharmacy
REUTERS/George Frey
By The Fiscal Times Staff

The House Ways and Means Committee released a new analysis of drug prices in the U.S. compared to 11 other developed nations, and the results, though predictable, aren’t pretty. Here are the key findings from the report:

  • The U.S. pays the most for drugs, though prices varied widely.
  • U.S. drug prices were nearly four times higher than average prices compared to similar countries.
  • U.S. consumers pay significantly more for drugs than other countries, even when accounting for rebates.
  • The U.S. could save $49 billion annually on Medicare Part D alone by using average drug prices for comparator countries.

Read the full congressional report here.

Chart of the Day: How the US Ranks for Retirement

Ken Bosma / Flickr
By The Fiscal Times Staff

The U.S. ranks 18th for retiree well-being among developed nations, according to the latest Global Retirement Index from Natixis, the French corporate and investment bank. The U.S. fell two spots in the ranking this year, due in part to rising economic inequality and poor performance for life expectancy.