Auto repair prices skyrocket thanks to new vehicle technology
Gxstocks' Jeff Flock reports on the 33% rise in auto repair costs across the past four years.
The average age of cars and light trucks on the road today in the United States has hit a new record of 12.6 years in 2024 as new vehicle prices remain high, according to vehicle registration data tracked by S&P Global Mobility.
The company says that’s an increase of two months since the end of 2023. The average selling price of a new vehicle in the U.S. last month was around $45,000, The Associated Press is reporting, citing data from J.D. Power.
"It’s prohibitively high for a lot of households now," Todd Campau, aftermarket practice lead at S&P Global Mobility, told the AP. "So I think consumers are being painted into the corner of having to keep the vehicle on the road longer."
S&P Global says the size of the U.S. vehicle fleet "surged to 286 million vehicles in operation (VIO) in January, up 2 million over 2023, but the distribution of vehicles by age is changing.
The average age of cars and light trucks on the road in the U.S. has increased to 12.6 years, S&P Global Mobility says. (Bill O'Leary/The Washington Post via Getty Images / Getty Images)
"Vehicles under the age of six accounted for 98M vehicles in 2019, or about 35 percent of VIO. Today they represent less than 90M vehicles and are not expected to reach that threshold again until 2028 when they will represent about 30% of VIO, according to S&P Global Mobility estimates," it said.
"This is driven by the impact of COVID and subsequent supply chain shortages that disrupted vehicle supply and registrations -- and following historically high volumes in 2015-2019," the company added.
CAR INSURANCE RATES SURGE AGAIN
Commuters sit in traffic on southbound Interstate 5 during the afternoon commute on March 12, 2024, in San Diego. (Kevin Carter/Getty Images / Getty Images)
S&P Global says companies in the U.S. aftermarket and vehicle service sector should see increased business opportunities as the age of vehicles grows, leading to more frequent repairs.
It said that electric vehicle use in America is also trending upward, with 3.2 million of them on the road as of January.
A driver plugs in a Tesla electric vehicle to charge at a Tesla Supercharger location in Santa Monica, California, on May 15, 2024. The number of electric vehicles on the road in the U.S. is increasing, S&P Global Mobility says. (Photo by PATRICK T. FALLON/AFP via Getty Images / Getty Images)
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"2023 EV registrations surpassed one million units for the first time and increased about 52% compared with 2022," according to S&P Global. "The rate of EV growth was slower than some automakers had anticipated, and there is potential for the average age of EVs to rise in the short term as consumer adoption slows."
