Want another sign of the used car apocalypse soon to hit the market? According to a news release from R.L. Polk, "Consumers are now holding onto a new vehicle, on average, for 63.9 months based on second quarter 2010 data, up 4.5 months from the same time last year."
Also, according to Polk, the average length of new vehicle ownership increased an average of 3.7% annually prior to the economic and auto industry meltdown in late 2008. Since that time, average length of ownership of new vehicles has increased more than 14%, with no signs of slowing down.
The release also says, "When considering registrations for used models, average length of ownership also is at a record high - 46.1 months - up from 43.8 months from the same period in 2009. New and used vehicles combined have an average length of ownership of 52.2 months based on second quarter analysis, according to Polk."
Getting the drift of why this is considered another sign of the used car apocalypse? (Maybe I should trademark that phrase.) Consumers are holding on to new cars longer, which means the used car supply isn't being replenished. Combine that with the fact that more people want used cars because of the down economy and the used car supply is shrinking while demand is increasing.
This could also have an effect on the certified pre-owned market because most CPO programs are for used cars 60 months or newer and it appears now that more than half of new cars are being held for longer. That market should not be as affected because leasing is increasing. Cars coming off lease are prime candidates for the certified pre-owned market.
What are your sentiments? Are you holding onto your cars longer? If so, why? Please comment below.