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Average Age of Cars & Trucks in Operation Rises to Record, as New Vehicle Sales & Miles Driven Plunged

, May 25, 2022, 0 Comments

The average age of all cars and light trucks in operation in 2022 rose to a new record of 12.2 years, according to S&P Global Mobility today. The metric tracks the average age of vehicles on the road, and not the average length of ownership.us-average-of-cars

“Average age” is a function of two factors – and we’ll get to those in a moment:

  • The number of new vehicles added to the national fleet in operation. Strong sales of new vehicles lower the average age of the whole fleet; weak sales raise the average age.
  • The number of older vehicles removed from the fleet through scrappage.

The average age of “trucks” rose to 13.1 years. “Trucks” is an industry misnomer that includes not only pickup trucks, vans, and truck-like SUVs, but also compact SUVs that are car-like and smaller than station wagons used to be, and that are immensely popular. The average age of “cars” rose to 11.6 years.

New vehicle sales plunged by total of 5.29 million vehicles in 2019, 2020, and 2021.

New vehicle sales in the US have been marked by 25 years of stagnation interrupted by steep plunges and recoveries. The peak was in 2016, when 17.55 million new vehicles were sold, just a hair above the prior record in the year 2000! Sales started declining again in 2017, and by 2019 were down to 17.11 million vehicles.

Then came the pandemic in 2020, and vehicle sales plunged. In 2021, demand returned, but the semiconductor shortages curtailed vehicle production globally, and new vehicle inventories vanished amid strong demand, and prices spiked by the most ever in recorded history, and these supply shortages kept sales at 14.95 million vehicles, roughly the same as in 1973.

If new vehicle sales in 2019, 2020, and 2021 had each year been the same as in 2018 (17.23 million), then 5.29 million more new vehicles would have been added to the national fleet.

And not getting better at the moment: In 2022 through April, new vehicle sales are down 16.6% year-over-year, as the semiconductor shortages and production problems continue to prolong the vehicle shortages.us-average-of-cars

This dramatic slowdown in new vehicles being added to the national fleet was in part responsible for the rising average age.

One of the reasons for this stagnation in new vehicle sales, despite a growing population, is that vehicles have been improving, and they last longer with fewer issues, and they look better for longer, and so consumers in aggregate drive these vehicles for longer before they finally end up in the junk yard.

This process, which has been going on for decades, allows people to drive older vehicles without problems, and they’re doing it – and so the average age of vehicles in operation (VIO) nearly doubled from 6.6 years in 1980 to 12.2 years in 2022.

Less wear and tear: miles driven plunged in 2020:

In 2020, the total number of miles driven by highway-legal vehicles of all types – passenger vehicles, buses, motorcycles, medium-duty and heavy trucks – plunged by 11% to 2.90 trillion miles in 2020 from the prior year, according to the Federal Highway Administration.

In miles, this plunge amounted to 325 billion fewer miles driven, which amounts to a lot of wear and tear that didn’t happen, and less need to replace vehicles, and less need to send vehicles to the junk yard. In 2021, miles driven bounced to 3.23 trillion, but was still below the levels of 2018 and 2019:us-average-of-cars

So scrappage declined.

In 2021, the number of vehicles that were scrapped fell to a little over 11 million vehicles, amounting to a scrappage rate of 4.2% of total VIO, the lowest scrappage rate in two decades, according to S&P Global Mobility. By contrast, in 2020, over 15 million vehicles were scrapped, for a scrappage rate of 5.6%.

The plunge in the scrappage volume and scrappage rate makes sense as the plunge in miles driven in 2020 extended the remaining lifespan of vehicles, while used vehicle retail prices spiked by 38% in 2021, and by 53% between February 2020 and December 2021. Given the spiking costs to replace older vehicles, more of them kept getting driven and repaired, instead of getting replaced and scrapped.us-average-of-cars

The national EV fleet is young and tiny, but growing.

The average age of EVs in operation declined to 3.8 years from 3.9 years, as new EV sales soared in 2020 and 2021, while sales of vehicles with internal combustion engines dropped. According to S&P Global Mobility, there were 1.44 million EVs in operation at the end of 2021, up by 40% year-over-year. But in the overall national fleet, they’re still only a minuscule factor, accounting for about 0.5% of all VIO.