US consumers hold onto vehicles longer, study says

Article by Christian Andrei, on November 10, 2010

Before the economic crisis in late 2008, the average length of new vehicle ownership rose at an average of 3.7% each year. But now, US consumers are holding onto their current vehicles longer and this rate has increased more than 14%, "with no signs of slowing down," according to automotive consultant Polk.

This trend has started in 2008 when new-vehicle sales had dropped coinciding with the financial downturn. On average, consumers are holding onto a new vehicle for 64 months, 4.5 months longer compared to a year ago. Polk mentioned that with more older vehicles on the road, firms that serve the automotive aftermarket stand to benefit.

As a result, used-car prices have increased, putting weight on new car prices.

A report from Polk revealed that during the economic downturn and the auto industry meltdown in the later part of 2008, the average length when it came to new vehicle ownership went up 3.7% on the average per year.

However since the period, this has increased to exceed14% and is expected to continue. Polk solutions consultant Eric Papacek revealed that ownership trends are what its customers continue to monitor.

With data on the trends available, both retail and aftermarket customers will be able to make the necessary plans on amount of service work needed and the parts required based on the ages of the vehicles being driven on the road, Papacek continued.

The average length of ownership based on used models registration was also up 46.1 months compared to 43.8 months for the same period in 2009. Polk added that based on analysis done for the second quarter, used and new vehicles combined had length of ownership averaging at 52.2 months

Press Release

Consumers Continuing to Hold onto Vehicles Longer, According to Polk

The average length of ownership of new vehicles continues to increase, according to a recent analysis from Polk. 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, according to Polk.

Length of ownership has risen each quarter since the end of 2008 (see table A) and serves as an indicator of business opportunities available to the automotive aftermarket, based on the increasing numbers of older vehicles in operation that may need service or parts, and an increasing number of vehicles on the road falling out of warranty.

It also highlights opportunities for manufacturers to consider targeting those consumers that are hanging on to older vehicles as potential customers for new vehicle purchases.

According to Polk, the average length of new vehicle ownership increased an average of 3.7 percent annually prior to the economic and auto industry meltdown in late 2008. Since that time, average length of ownership of new vehicles has increased more than 14 percent, with no signs of slowing down.

"Ownership trends are something our customers watch very closely," said Eric Papacek, Polk solutions consultant. "Armed with insightful data on these trends, aftermarket and retail customers are able to appropriately plan for levels of service work and parts that may be required based on the increased age of vehicles on the road," he continued.

When considering registrations for used models, average length of ownership also is at a record high -- 46.1 months -- up from 43.8 months from the same period in 2009. New and used vehicles combined have an average length of ownership of 52.2 months based on second quarter analysis, according to Polk.

About Polk
Polk is the premier provider of automotive information and marketing solutions. We collect and interpret global data, and provide extensive automotive business expertise to help customers understand their market position, identify trends, build brand loyalty, conquest new business and gain a competitive advantage. We help automotive manufacturers and dealers, automotive aftermarket companies, finance and insurance companies, advertising agencies, media companies, consulting organizations, government agencies and market research firms make good business decisions. A privately held global firm, Polk is based in Southfield, Michigan with operations in Australia, Canada, China, France, Germany, Japan, South Korea, Spain, the United Kingdom and the United States

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