Number of Cars in U.S. is Shrinking -- But Maybe Not For Long
Apr. 05, 2010
It’s a historical first, according to the Los Angeles Times. Over a 15 month period recently, Americans scrapped more cars than they bought.
Automotive News explains, “More Americans ditched older cars than bought new ones during a 15-month period ending last September, according to a report released this week by R.L. Polk & Co. Polk found that more than 14.8 million cars and light trucks were scrapped in the U.S., compared with new vehicle registrations of just more than 13.6 million.” The trend comes despite last year’s popular Cash for Clunkers program, which gave Americans cash to buy a new car when they turned an old one in for the crusher – a one-to-one swap.
Automakers are taking the news as a good sign. AN notes, “Scrapping statistics are viewed in the industry as a bellwether for future gains in vehicle sales. The higher the rate of scrapping, the more likely that the demand for new and used vehicles will rise -- especially if the economy is improving.”
Polk Vice President Lonnie Miller told the Detroit Free Press, “It foreshadows what may be pent-up demand.”
If other findings from the survey are right, a lot of us are driving around older cars that could break down on us at any moment. USA Today notes, “The average age of cars and trucks in the U.S. is now at its highest level since at least 1995,” according to Polk. “The average age of cars and trucks is now 10.2 years.” Companies that rely on truck sales have the most to look forward to, since those who drive pickups appear to be delaying purchases at a higher rate than those of us in cars. “The average age of a car remained unchanged last year, but the age of trucks crept up,” USA Today reports.
While the news is good for automakers, it may not be encouraging for those in the used car market. Matthew Shapiro, an economist at the University of Michigan, told the Free Press that the trend “will indirectly result in higher used car prices.
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