Longer vehicle warranties, improved reliability and a downward economy are some of the factors cited by automotive data researcher R.L. Polk to explain why new-car owners are staying with their vehicles for 71 months. That's an all-time high, according to the researcher, as is the 50-month period for used-car purchasers keeping their vehicles.
While the findings of Polk's report -- based on vehicle-registration data through last September -- is buoyant news for auto-parts retailers and independent repair and service shops, it's not particularly good for automakers who market new cars.
Polk researcher Mark Seng writes that pent-up demand for new cars will boost sales somewhat, and that the market could return to pre-downturn annual sales levels of 16 million cars and light trucks by 2015. "However, this doesn't mean that the average length of ownership will immediately start to decline." Sales of cars and trucks in 2011 reached almost 12.8 million units, according to Automotive News.
Polk suggests that marketing and advertising managers monitor the length of ownership "to determine when consumers may come back to market."
Alan Baum, a Michigan-based automotive industry analyst, agrees that the economy is dissuading new-car buys. "The automakers themselves are changing their business models. They've reduced their incentives and production volume, and found this isn't a bad thing. It allows them to increase net prices and not tax factories to the limit."