Yes, another consequence of COVID
By Gary S. Vasilash
During 2020 probably one of the last things on anyone’s mind was buying a new car or truck unless, of course, they had a feeling of being locked in and locked down so they wanted to get out there and do something with the money that they were not spending on cruises or long weekends in Las Vegas.
Light vehicle sales went down.
And according to research from IHS Markit, a consequence of that is that the age of vehicles in people’s driveways went up.
Up by almost two months.
According to the research firm the average age of a light vehicle is 12.1 years old.
(Image: IHS Markit)
Another thing happened, IHS found. The number of vehicles that were taken out of active service went up. Known as “scrappage,” some 15+ million vehicles—or 5.6% of all vehicles in operation—were, well, scrapped.
One would think that this would have made the average age go down, but the reduced overall sales and a drop in vehicle miles traveled caused, in the words of Todd Campau, associate director of Aftermarket Solutions at IHS Markit, “a radical departure from the norm.”
On the subject of vehicle miles traveled, they were down over 13% in 2020.
One result of that is that people may have allowed their registrations to expire because they weren’t going anywhere.
And if they kept it, they may be in for a happier 2021.
Campau: “The microchip shortage and subsequent inventory levels for new vehicles have created a situation in which used vehicle values have gotten extremely high, so a vehicle owner who may have kept a vehicle in the garage that they were not using in 2020, now instead may take advantage of the opportunity to either reduce the number of vehicles in their garage, or trade up to something newer while the demand and value is extremely high on their used vehicle.”
Of course, this means being able to find a vehicle that they may actually want if said vehicle isn’t a high-end SUV or loaded pickup, which is what OEMs are focusing on building as they meter out their silicon to vehicles that provide them with the highest margins.
IHS anticipates that the aging fleet will, however, get younger, as more people get in the market in 2021.
Not a fountain of youth. But a move in the right direction.