The coronavirus pandemic idled assembly lines and forced dealerships to temporarily close, and this appears to have had an impact on the average age of vehicles in operation in the United States.
According to a study by IHS Markit, the average age of light vehicles in operation rose nearly two months last year to 12.1 years old. That’s the oldest average in decades and vehicle age has increased dramatically since 2002, when they averaged 9.6 years old.
Interestingly, the number of vehicles exiting the active population climbed dramatically as scrappage “saw its highest volume in two decades at over 15 million units.” While an increase in scrappage would normally be accompanied by a decline in average vehicle age, 2020 wasn’t a normal year by any stretch of the imagination. Last year saw the first decline in vehicles in operation since 2012 as roughly two million were taken off the road.
The increase in age could be short-lived as sales of new vehicles picked up significantly in the second half of last year as more than 8 million were registered in the last six months of 2020. That being said, there are plenty of issues that could complicate things including the ongoing chip shortage and low levels of new vehicle inventory. Of course, sky high prices for used vehicles could tempt owners to cash-in and upgrade to something new.
IHS Markit expects sales to hit 16.8 million units this year and noted electric vehicles are growing in popularity as there were “strong registrations through 2020.” As a result, there were nearly 1 million EVs in operation last year.
Speaking of EVs, owners hold onto them as 89% of 2016-2020 model year electric vehicles are still registered to their original owner. That compares to 68% for vehicles powered by gasoline.
