New cars have turned high-tech, loaded with features you usually find on smartphones. But even with all these gadgets available in new cars, vehicles on the road keep getting older.
The Associated Press reports that the average age of vehicles on the road in the U.S. is a record 11.5 years old, citing information from the consulting firm IHS Automotive.
While new cars and trucks are increasingly packed with tech that keeps drivers entertained and connected, they’ve also become more reliable, so owners are holding on to them longer.
Even cars made just a few years ago, before all the high-end tech made its way onto dashboards, are proving to be incredibly reliable out on the roads.
On average, new car owners now keep their vehicles for almost 6.5 years. Used car owners average 5 years.
While reliability is certainly a factor, economics is at play as well. A new trend toward longer loans has buyers owning vehicles longer in order to make monthly payments more affordable, even if it means paying more interest in the end.
The AP also reports that almost 30 percent of all new vehicles financed in the first three months of this year came with six to seven year loans — falling within the range of the average ownership length data from IHS.
Sixteen percent of used vehicles sold in the first quarter were also purchased with similar long-term loans.
Car sales have recovered in recent years as the country rebounds from the recession. New car sales rose from 12.7 million in 2011 to 16.5 million in 2014. That number is expected to reach 17 million this year, if the current selling rate holds up.
The increase in new car sales should even out the average age of vehicles on the road in the next few years. IHS expects the average will hit 11.6 years next year, but it won’t make it to 11.7 until 2018.
Even as alternatives like public transportation and biking become more popular with millennials, more experts have become convinced that young people are increasingly more interested in owning vehicles as well, as the Atlantic reported in April. Longer loans with more affordable monthly payments could be one of the factors bringing them to dealerships.
For story ideas, talk to your local dealerships and banks about their average auto loans and if buyers are taking out longer loans. See if you can find a few new car owners with these longer loans and ask them if they’ve been beneficial financially. Are they unhappy that they will have to pay more in interest and hold on to their vehicles for a few more years?