Report: Motorists holding onto their vehicles longer than ever
Over the last year, we've presented a number of articles illustrating that motorists are holding onto their vehicles for longer than ever before.
A recent report indicates that this trend has now hit a new high, as the average vehicle age has now reached 12.6 years old.
There are many reasons behind this phenomenon, including higher average new-car transaction prices, higher loan financing amounts (both the interest rate and the number of years needed to pay off the loan), and a reluctance by consumers to pay for “excessive features” that are unwanted (or even annoying). These factors have converged to not only hamper new car sales, but also create unforeseen repercussions for consumers.
However, from a larger perspective, even as new vehicle sales dip, the number of used vehicles on the market has also fallen. In fact, the availability of used vehicles has diminished to such an extent that even new car dealers are being affected. Why? Because used vehicle sales help new car dealers maintain their operations, even as new-car sales suffer. When a customer comes in and cannot afford a new car, they are steered toward a used car that fits their budget and helps close a sale.
To combat this, automakers have revised their medium-term plans. In doing so, they are investigating if they should continue to shift portions of their portfolios to EV-products and revisit the “affordable-entry-level” and “small-car” segments (which were nearly abandoned only a few years ago, in favor of higher margin products like pick-ups, SUVs, crossovers, and luxury cars).
And yet, while both automakers and consumers are directly affected by this trend, there are also tangible ramifications for our members and the wider repair industry.
It is obvious that the longer a vehicle is on the road, the more likely it will require maintenance in order to extend its useful life. Older road-worthy vehicles have likely already been paid off by their owners, which is financially favorable to their owners.
Still, aside from routine maintenance, these cars may need periodic “big repairs” to keep them running longer. This creates additional opportunities to service your patrons and keep their personal vehicles running efficiently.
Are you taking this shift in buying behavior into account as you advertise and communicate with patrons? Have you spoken to customers with older cars about what can be done preventively to keep their cars running longer? If not, you should consider marketing materials to appeal to these patrons.
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