SAN FRANCISCO (Reuters) - Automobile owners in the United States are holding on to their vehicles longer, according to a new study, even as major supply disruptions caused by the COVID pandemic ease and availability at dealerships rise.
The average age of U.S. cars and light trucks this year rose to a record 12.6 years, according to the report by S&P Global Mobility on Wednesday, up by two months from 2023.
Though the rise in the average age of vehicles has slowed as new registrations improve, S&P said it expects those aged six to 14 years or older to account for 70% of the vehicles in operation over the next five years.
"This continues to improve business opportunities for companies in the aftermarket and vehicle service sector in the U.S., as repair opportunities are expected to grow alongside vehicle age," S&P said in the report.
The average age of battery-powered vehicles is also set to rise in the short term after holding steady at about 3.5 years since 2019 as new vehicles accounted for a large share of those in operation.
But high interest rates meant to tame stubborn inflation has soured consumer sentiment for electric vehicles (EVs) - typically pricier than their gas-guzzling counterparts - and led to a slowdown in demand.
"We started to see headwinds in EV sales growth in late 2023, and though there will be some challenges on the road to EV adoption that could drive EV average age up, we still expect significant growth in share of electric vehicles in operation over the next decade," Todd Campau, aftermarket practice lead at S&P Global Mobility, said in the report.