Discover the Hidden Costs of Keeping Your Car Longer
How Long Do Consumers Plan to Keep Their Cars?
The idea of consumers hanging onto their cars longer has been on the rise. In 2024, the average age of a car on American roads is 13.6 years, compared to 8.4 years 30 years ago. In Canada, the vehicle age is about 11 years. Some people keep their cars due to financial constraints, while others believe in the longevity of their vehicles. This shift in consumer behavior has led to a change in the automotive market.
For example, luxury nameplates like BMW and Mercedes-Benz had their lowest representation on the top-10 searched and sold vehicles list for the second year in a row. This shows that consumers are becoming more cautious and opting for more practical, mainstream models.
The Benefits of Keeping a Car Longer
Cars are built more reliably these days, and they should last longer with less maintenance. An odometer churning over 100,000 km is the expected norm, and some Japanese rigs even aim for double or triple that. The continued domination by Toyota of annual retained value ratings proves that these vehicles can hold their value over time.
Maintenance is also cheaper than repair. By keeping a car for a longer period, owners can avoid the high costs associated with frequent repairs. However, it's important to note that a poorly maintained vehicle can be dangerous for both the owner and other road users.
The Challenges of Delaying Maintenance
While keeping a car longer can save money, delaying maintenance can lead to more significant problems in the long run. Some aftermarket outfits are reporting steep drops in sales, and some are taking a hit on the stock market. This indicates that consumers are not prioritizing maintenance.
Tire shops are also feeling the impact as people opt for cheaper imports. But one round of inferior tires can be a warning sign that maintenance has been neglected. It's crucial to maintain an older car properly to avoid costly repairs down the line.
The Role of New Tech in Aftercare
The aftercare market has been focused on new tech, such as servicing electric or hybrid vehicles. While the sector has been making progress in training for these changes, it's important to ensure that existing vehicles are also well taken care of. Recessions and economic uncertainty are nothing new, and history shows that we go through cyclical shifts.
Maintaining an older car to delay the purchase of a new one requires regular servicing. If owners neglect this, they may end up paying a lot more in the future.
Consumer Attitudes and the Market Shift
Senior analyst Daniel Ross noted a change in consumer attitudes as they coped with rising costs. The push to hybrids and plug-ins shows that buyers are considering the total cost of ownership instead of just a monthly outlay. This shift in thinking is reflected in the market, where luxury and pricier vehicles are sitting longer as consumers head to more affordable options.
Every year, more features that were once exclusive to luxury cars are becoming standard on every vehicle. This makes it easier for consumers to hold onto their current cars without feeling like they're missing out on the latest technology.
The Importance of Safety
European New Car Assessment Program (ECAP) has announced that new cars will need to have fewer screens and more human-friendly intuitive buttons to earn a 5-star safety rating. This shows that safety is a top priority, and it's something that consumers also value.
Centre stacks topped by giant screens can be a distraction, especially for older drivers. By focusing on safety features that are intuitive and easy to use, manufacturers can make cars safer for everyone.
Want to hang on to your senior vehicle? Check out Driving.ca's Brian Turner's tips on maintaining it. With the right care, your car can continue to serve you well for years to come.
Uncover the Hidden Challenges in the Automotive Sector
Vehicle Age and Its Implications
In North America, the average age of light passenger vehicles now ranges between 11 and 13.6 years. This indicates a shift in the vehicle landscape, with older vehicles becoming more common. As a result, the need for proper maintenance becomes even more crucial. However, as the report highlights, 30 percent of these vehicles are overdue for some form of maintenance. This poses a potential risk to their performance and longevity.For example, consider a vehicle that has been on the road for several years without regular servicing. Over time, the engine may start to experience issues such as decreased fuel efficiency, increased emissions, and even potential breakdowns. These problems not only affect the vehicle owner but also have an impact on the overall environment.The Impact on Tire and Auto-Supply Stores
Looking at more detailed statistics, in May of this year, shares of tire chain Munro plunged by 12 percent. This was primarily driven by a strained low-to-middle-income consumer who traded down to tires at opening price points. The reason behind this is that these consumers are facing economic pressures and are forced to make cost-cutting decisions when it comes to vehicle maintenance.Similarly, in September, shares of Genuine Parts, the owner of Napa auto-supply stores, crashed by more than a fifth. This was the company's biggest-ever one-day drop in decades on the stock market. The reason for this drop was the continued cautious end consumer who is deferring certain services and maintenance-related purchases. This shows how the lack of regular vehicle maintenance is directly affecting the sales and profitability of auto-supply stores.The Role of Electric Vehicles
North America has also witnessed a rise in electric vehicle sales. These vehicles do not require oil changes and have fewer moving parts, which could potentially depress business for auto parts stores and quick-lube chains. However, it is important to note that this is a relatively recent trend and may not fully explain the skimpy spending on vehicle maintenance.In addition to economic strains, another factor contributing to the decline in vehicle maintenance is the pandemic and the work-from-home trend. With more people working from home, the need for daily vehicle use has decreased, leading to a neglect of regular maintenance tasks.Autozone CEO Philip Daniele told The Wall Street Journal that in tougher economic times, people will generally defer maintenance and discretionary items early in the cycle. They start to repair their cars because they realize that a little investment today in maintaining their vehicle can defer a major repair into the future.To see the full report and gain a deeper understanding of these trends, click here.