Cars made today last significantly longer than cars made 12 years ago, and that cars made 12 years ago were built significantly better than cars made 12 years before that model year.
The average length of ownership for both new and used cars is longer than the average length of a car loan, indicating that Americans are increasingly holding onto their cars beyond the length of their loans.
- The average length of ownership for:
- new car was 8.4 years in 2021, up from 6.5 years in 2006. (source: IHS Markit)
- used car was 66.5 months in 2020, up from 63.7 months in 2015. (source: Edmunds)
- A record high of 26.8% of new car buyers traded in a car that was 10 years or older in 2021. (source: Cox Automotive)
Length of Loans:
- 10 years ago (Q2 2012):**
- Average length of a new car loan: 64 months
- Average length of a used car loan: 59 months
- 20 years ago (Q2 2002):***
- Average length of a new car loan: 60 months
- Average length of a used car loan: 54 months
- Current (Q2 2021):*
- Average length of a new car loan: 69.4 months
- Average length of a used car loan: 64.8 months
*https://www.experian.com/content/dam/marketing/na/automotive/quarterly-webinars/state-of-the-automotive-finance-market-q2-2021.pdf
**https://www.experian.com/content/dam/marketing/na/automotive/quarterly-webinars/state-of-the-automotive-finance-market-q2-2012.pdf
***Finance Rate on Consumer Installment Loans at Commercial Banks, New Autos 48 Month Loan
p.s. this is a ChatGPT rabbit hole post (took 1hr to compile this query)
