A report by IHS Markit indicates that the average age of a motor vehicle in the United States is 11.6 years. Currently the number of registered vehicles in the world’s biggest economy is 264 million, an increase of 6.2 million in the last three years.
Though motor vehicles whose age is between new and five years are expected to increase by 16% in the next four years, older cars are sticking around for longer. The number of cars aged 16 years and above are expected to increase to 81 million by 2021 up from the current 62 million. In four years, the number of motor vehicles that will have existed for over two and a half decades will be over 20 million. This has been attributed to the rising quality.
“Quality of new vehicles continues to be a key driver of the rising average vehicle age over time,” an IHS Markit director, Mark Seng, said.
Cash for clunkers
By late 2015 the average period of ownership for a new car was approximately 79.3 months while it was 66 months for used cars. This was a significant increase from the previous ten years. In 2015 the number of cars joining the scrap heap declined to 11 million compared to 14 million three years earlier.
The IHS Markit report coincides with findings by iSeeCars.com, a market research firm, which found that on average car owners are disposing of their vehicles between 12 and 24 months after completing their financing terms.
Among the car models that are staying in the hands of their owners the longest include those from Toyota Motor Corp (ADR) (NYSE:TM). This includes Toyota 4Runner with the average number of years that it is owned being 8.8. Another Toyota model that is owned on average for just as long as the 4Runner is the Toyota Avalon sedan. Toyota Sequoia is owned for a slightly longer period at 8.9 years while Toyota Land Cruiser beats them with the average number of years it is owned being 10.6.
On Monday shares of Toyota Motor Corp rose by 0.52% to close the day at $112.84.