Topic: Consumers Continuing to Hold onto Vehicles Longer

[Jeffy]

Consumers Continuing to Hold onto Vehicles Longer, According to Polk

Midyear analysis shows increasing length of ownership of new vehicles; bodes well for automotive aftermarket

SOUTHFIELD, Mich. (Nov. 3, 2010) – 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

Table A. Average Months of Vehicle Ownership, Q1 2008 to Q2 2010

[Dylan]

Guess I'm slightly higher than average... bought my '00 SE in August of 99, I've had it over eleven years now 

[chrisfranklin]

   Dylan.  Have 11 years with my '94 YJ (bought in '99).  My dad has a 1st gen Explorer EB he's had for more than 20 years and he still uses for hauling stuff; he's modified the engine and suspension slightly over the years and it drives a lot better than new with over 300k on the od. 

[dwtaylorpdx]

I drove my 94 off teh lot brand new, 210K Miles ago..... :)

Dave

[Jeffy]

I drove my 94 off teh lot brand new, 210K Miles ago..... :)

Dave

I drove my '92 off the lot as well.  Although, the dealer had either used the Jeep as a demo or it got shuffled around a lot as it has 96 miles on the OD.  No one liked the color.  Same goes for the Malibu Yellow S they had.  Mine gets driven every day as it's my only vehicle.  Depending on the hand I'm given, I might make it a bit more street worthy though.  I'd have to have to sell it.

I think the real reason people are holding onto their cars longer is two-fold.  One, the economy and two, the cost of new cars are a lot higher then they used to be in the past.  When I bought my Jeep, the base price was $11,995 or $12,995.  Since then, with every passing year the price has gone up by $1000.  So now the base price of the current Wrangler is $21,165 which is a huge jump.  You won't have a basic car for under $15,000 these days and really you're looking closer to $17,000 then $15,000 once you're done with tax, licensing and any must have options.

Since the economy fell, I've seen more and more older cars that you wouldn't have seen on the roads before.  I bet this is for several reasons, like cheaper initial cost, pre-76's don't need to be smog'ed, lower insurance and even lower licensing fees.  Also, mileage on some of the cars back then were higher then cars today since there is less added weight.  I've seen a few CRX HF, old VW bugs, M30's and a few others out on the roads more often.

[TrailsLessTaken]

I'm the third owner on my '91 jeep and have had it since 2000 I believe, it had around 72,000 miles on it, and I am up to somewhere around 120k or so now and dont plan on selling it any time soon