director of forecasting for Polk claimed:
“The days when you bought a vehicle for 4 or 5 years are likely over."
If you look at the appended video, over the shorter term at least, U.S. new auto sales are actually doing reasonably well. The U.S. big three are making a comeback and Toyota is roaring back as well. It is Europe that is in the doldrums with companies such as Peugeot on the ropes.
However, Americans are holding on to their new cars
longer. There are several reasons for this. Cars last longer. Prices, for new cars are now so high that people are not willing to invest in a new car that often. Financing is stretched out over more years to six, seven and even eight years.
For years, automakers depended upon customers to move up to a new car every three or four years. Pratt claims:
“When we were younger, we had to replace vehicles out of necessity. That’s not the case anymore. The vehicles are much better quality, they’re lasting much longer, so really, there is no need to replace vehicles.”
Although there will be less chance for automakers to entice buyers away from their existing brands, when the time does come for a customer to buy a new car, they may change to another manufacturer because they may need a different model as their life situation changes. But surely, these days most manufacturers have models for every need. I suppose that the customer might look around more though if they were about to change models or their type of vehicle.
There had been a run up in used car prices as the recession hit purchases of new cars but figures
are already showing a decline. The wholesale auto auction firm Adesa, shows that the average prices this September have dropped from a year ago. The average car price was $8.680, a drop of $187 from last year. The average truck was $9,475, down $347 dollars from last year. Analysts doubt that this trend will last much longer.
As a Canadian I do not figure in these daya. Personally, I have never bought a new car and since I am well past 76, according to Polk assumptions, I never will. My strategy was always to buy a clunker and drive it until it went to the salvage yard. However, my wife, bought a new vehicle so I get to ride in one at least. We use my 99 Metro and 84 Citation as spares.