The Three Year Vehicle Purchase Cycle Is Dead And Not Coming Back

Reports of the death of the two to three year vehicle purchasing cycle have not been exaggerated according to a new survey of nearly 4,000 car owners by AutoMD.com*. Three in four respondents agreed that buying a vehicle every two to three years is a thing of the past, and seventy-eight percent now say that 10+ years (or until it dies) is the appropriate vehicle lifespan. Most telling is that over half say that a better economy would not change their habit of holding onto their vehicle for longer.

Drivers Keep Vehicles for Over Ten Years:

Over 10 years 78 percent
8 - 10 years 15 percent
6 – 7 years 4 percent
3 – 5 years 3 percent

The survey indicates, furthermore, that the longer ownership trend is spurring consumers to seek out independent repair shops over dealership service centers.

The survey results confirmed other industry data showing an aging vehicle fleet on U.S. roads: for the second year in a row, sixty percent of survey respondents say their primary vehicle has over 100K miles. Sixty-six percent plan to drive their primary vehicle for over 150K (or until it dies) and over half plan to rack up 75K more miles than on their previous vehicle.

While the economy continues to be the number one reason for holding on to vehicles, vigilant repair and servicing also ranked highly. And, automakers might want to take note: of those planning to hold onto their vehicles for longer (the majority!), over fifty percent say they will be more influenced by practicality than style when purchasing their next vehicle.

An Aging Fleet on the Streets - According to the survey, the primary vehicle of sixty percent of respondents has over 100K miles, a number unchanged from 2011 and up over thirteen percent from 2010. Two in three respondents will drive their vehicle for more than 150K miles (or until it dies), and eighty percent plan to drive it for over 100K miles.

Approximately how many miles does your primary vehicle have on it?

Over 100K 60 percent
60-100K 23 percent
40-60K 7 percent
20-40K 5 percent
Less than 20K 5 percent

When asked why they plan to keep their primary vehicle for over 100K miles, respondents cited the economy (47 percent) and vigilance with repair and service (44 percent) as the top reasons, followed by cost savings (37 percent), DIYing (28 percent), and better built cars (19 percent).

Bad Economy and Vigilant Servicing Drive Car Ages Up

Economy 47 percent
Vigilant repair/service 44 percent
Cost Savings 37 percent
DIY-ing 28 percent
Better built cars 19 percent

While the economy has driven car owners to hold onto their cars for greater periods of time than ever before, the survey indicates that this is no passing trend. Forty-five percent surveyed report that their viewpoint on the appropriate lifespan of a vehicle has changed in the past five years: they now view vehicle ownership as a much longer-term proposition. Three in four respondents agree that getting a new vehicle every two to three years is the old model and a thing of the past. And the vast majority say the appropriate vehicle lifespan is more than triple that: nearly eighty percent consider it to now be 10+ years (or until it dies), with ninety-three percent saying eight years or more (or until it dies).

Significantly, of those who are more likely to hold onto their vehicle for longer, over half report that an improving economy would not spur them to shorten the lifespan and buy a new vehicle.

When asked how this new longer vehicle life cycle would impact the choice of their next vehicle, 52 percent said they would be more influenced by practicality than style because they want the vehicle to last, while only 21 percent said they would be more influenced by style. And among those who said they planned to purchase in 2012, a late model used vehicle was the number one choice.

Select the reason that best describes why you plan to purchase a vehicle this year

My car is at the end of its life, I have no choice but to replace it - 54 percent
There are some really great vehicle models on the market - 27 percent
Historically low finance rates and wider credit availability mean I can get a really good deal - 11 percent
Improving economy has made me feel more confident about buying - 8 percent

Of the survey respondents, about twenty percent of DFMers and thirteen percent of DIYers said they planned to purchase a new vehicle in 2012, with over half saying that they are purchasing simply because they have no choice, their vehicle is at the end of its life.

*The AutoMD.com survey was conducted online among nearly 4,000 car owners from March 2012 – May 2012.

NAFA Fleet Management Association
125 Village Blvd., Suite 200
Princeton, NJ 08540

Telephone: 609.720.0882 Fax: 609.452.8004