The Boredom Index? Americans and Their Cars and Trucks
Could it be that we're tired of driving the same car or truck for five or six years and have decided it's time for a new ride in the driveway?
The latest data from Experian shows the average length of ownership for a new vehicle in the second quarter dropped 66.2 months. That's a decline of just under two months from the same time last year.
While that change may not be a huge one, it's further proof Americans are trading out of old cars into new cars at a slightly faster pace.
Length Of New Car Ownership
Here's how the length of ownership for a new car has changed over the last three years.
New Cars, New Deals
So what's driving the rotation into newer cars and trucks at a faster rate? There are a variety of factors, but some of the more prominent reasons include the improving U.S. economy, the fuel economy of new vehicles and the low financing rates we're seeing right now.
Improving U.S. Economy: Not surprisingly when the recession was at its worst people held on to their new cars for the longest period of time. Why take on a new car payment given the high unemployment rate and other discouraging news about the U.S. economy.
Fuel Economy of New Vehicles: In the last three years the average fuel economy for new cars and trucks (and yes, even SUV's) has improved dramatically. It's now 23.8 MPG for vehicles sold in September, according to the University of Michigan. That improvement (up 18% since 2007) is prompting buyers to go into showrooms as gas prices have gone up.
Low Financing: In the last three years the credit markets for auto loans have thawed and it's easier for a wider range of buyers to finance a new car or truck. People are taking advantage of that opportunity, especially with leasing offers of payments under $200/month.
New Car Ownership By Brand
Finally, take a look at the latest survey of how long buyers of particular new vehicles hang onto those models when they are bought new. The Average may be 66.2 months, but for many brands, it's not uncommon that new buyers hold onto those models for more than 80 months.