Americans are driving even older cars than ever before, as prices for new cars remain prohibitively high for many. This year, the average age of cars in the U.S. is 12.6 years, S&P Global Mobility reported this week.
That's up by two months from last year's age — which also set a record for older vehicles on the road. However, per S&P Global Mobility, cars' aging is slowing, a trend line that correlates to prices.
Prices of new cars jumped between 2021 and 2022, as the pandemic caused severe supply disruptions that impacted car manufacturers, changing the market. Even taking inflation into account, car prices surged significantly. Since mid-2022, new car prices have been somewhat stabilizing, especially as supply is catching back up, but they still remain high.
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Prices are "prohibitively high for a lot of households now," Todd Campau, aftermarket leader for S&P Global Mobility, told the Associated Press. That is leading to many people driving cars for longer rather than trading them in for a new model.
The average price of a new vehicle was $48,510 in April, according to Cox Automotive, which is 0.5% lower year-over-year. The April average price represents a slight increase following a brief period of declining prices, although the price increase also came alongside a drop in discounts offered.
Want to buy a new car? Good signs on the horizon
Despite the trend of aging cars, there is evidence that new car prices are getting somewhat more affordable.
As auto supply continues to recover from the COVID-19 shock, there is an expectation that new car prices will also continue to stabilize. Cox Automotive also expects discounts to "slowly grow through the remainder of 2024 to help keep any sales momentum alive," executive analyst Erin Keating said.
If you're in the market and looking for a good deal, JD Power has collected the best deals in May 2024.
In the latest consumer price index report, used cars and trucks declined 1.4% in a sign of deflationary pressure among goods and services, while prices for new vehicles slipped 0.4%
Additionally, if you are driving an older car, there's good news, too. Cars are losing value more slowly, according to a recent report, with new cars retaining roughly 10% more of their value after three years than they did in 2019.
Other factors impacting car affordability
Of course, driving a car comes with more costs than just that purchase price, and drivers have been feeling a crunch across multiple waves.
Kiplinger's energy outlook predicted gas prices to rise as we approach the summer season. Indeed, the current national average gas price is up year-over-year at $3.615 for regular; in 2023, that was $3.543, per AAA.
Auto insurance premiums are soaring, and, as the Kiplinger Letters team reported, new cars that feature advanced safety systems can have higher insurance rates because those systems cost more to replace in the case of an accident. There are, though, ways for ways seniors can save on car insurance.
On the flip side, however, there's always the EV tax credit if you choose to get an electric vehicle. And if you're not comfortable getting a new car quite yet with prices as they are, you can at least rest easy considering keeping a car longer is sometimes better for the environment anyways, if you don't drive all that much, Outside magazine reported.
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