Here’s Why Americans Are Keeping Their Cars Longer than Ever
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.
Top Reads from The Fiscal Times:
- Why Hillary Clinton’s Tax Plan to Soak Investors Won’t Work
- US Health Spending: $3.1 Trillion a Year and Growing
- Joe Biden: The Looming Threat to a Republican Presidency
Quote of the Day: A Big Hurdle for the Tax Cuts
“He goes in and campaigns on an issue, and the challenge is he then talks about executing drug dealers. Why do you think the press is going to cover the tax cuts if you’ve given them the much more exciting issue?”
-- Grover Norquist, president of tax-cutting advocacy group Americans for Tax Reform, on President Trump’s failure to sell the tax law.
The Obamacare Mandate That Could Produce $12 Billion in Fines in 2018
Republicans effectively eliminated the individual Obamacare mandate in the tax package signed late last year. Although the new regulation reducing the mandate penalty to zero doesn’t take effect until 2019, President Trump has cited the rule change as a victory over the health law so many conservatives oppose. “Essentially, we are getting rid of Obamacare. Some people would say, essentially, we have gotten rid of it," Trump told a crowd in Michigan two weeks ago.
However, many parts of the Affordable Care Act are still in effect and will continue to operate even after the individual mandate is eliminated in 2019.
In particular, the employer mandate, which requires companies with more than 50 employees to offer health benefits or face fine of roughly $2,000 per worker, will continue to play a significant role in the Obamacare system. The Congressional Budget Office estimates that the mandate will produce more than $12 billion in fines in 2018 alone.
Some conservative groups are pushing lawmakers to stop enforcing the employer mandate, but the IRS is still working to enforce the law. According to The New York Times Monday, the IRS is sending out notices to more than 30,000 businesses that have failed to comply.
Chart of the Day: It’s Still the Economy, Stupid
Security may be the top policy issue for Republican voters, but the economy is the top concern for Democrats, independents and voters overall, according to Morning Consult’s latest polling on the midterm elections. Health care is third on the list, followed by “seniors’ issues.” The results are based on surveys with more than 275,000 registered U.S. voters from February 1 to April 30.
Number of the Day: $13 Billion
An analysis by Bloomberg finds that the roughly 180 companies in the S&P 500 that have reported earnings for the first three months of the year saved almost $13 billion thanks to the corporate tax cut enacted late last year. Those companies’ effective tax rate dropped by more than 6 percentage points on average. About a third of the tax savings went to 44 financial firms.
How a Florida Doctor with Social Ties to Trump Delayed a $16B Billion VA Project
A West Palm Beach doctor who is friends with Ike Perlmutter, the chairman of Marvel Entertainment and an informal adviser to President Trump on veterans’ issues, has held up “the biggest health information technology project in history — the transformation of the VA’s digital records system,” Politico’s Arthur Allen reports. Dr. Bruce Moskowitz “objected to the $16 billion Department of Veterans Affairs project because he doesn’t like the Cerner Corp. software he uses at two Florida hospitals, according to four former and current senior VA officials. Cerner technology is a cornerstone of the VA project. … Moskowitz’s concerns effectively delayed the agreement for months, the sources said.” Read the full story.