Average Age Of Vehicles Reaches Record High, According To Polk

The average age of cars and light trucks currently in operation in the U.S. has increased to 10.8 years, according to Polk. Passenger cars showed a modest increase in age since 2010, from 11 years to just 11.1 years at the end of June 2011. Light trucks (including pickups and SUVs) show a more sizeable gain in the same timeframe, from 10.1 years to 10.4 years.

Overall, average vehicle age has been increasing quickly over the past five years. Polk reports average age based on an analysis of national vehicle registration data.

Declining Sales in 2008-09 Continue to Impact Age of Fleet

The slowdown of the aging of passenger cars directly correlates to the low sales volumes and the mix of car and truck sales in the U.S. market in 2008 and 2009, a time in which more trucks than cars were registered. While more trucks were sold over the same time frame, they showed a faster aging rate. Polk expects this trend may change in the coming years as the CUV and small SUV populations in the U.S. market have risen in 2010 and 2011 due to their continued success in the market. Additionally, the rebound in new vehicle sales in 2011 and for the next couple of years will most likely slow down the aging rate seen in the market over the past three years, according to Polk.

“The increasing age of the vehicle fleet, together with the increasing length of ownership, offers significant business growth opportunity for the automotive aftermarket,” said Mark Seng, global aftermarket practice leader at Polk. “Dealer service departments and independent repair facilities, as well as aftermarket parts suppliers, will see increased business opportunity with customers in need of vehicle service.”

Year-Over-Year Light Vehicle Population Declines Come to an End

2011 marked the end of the U.S. vehicle population decline that has occurred annually since 2008. According to Polk, the total vehicles in operation (VIO) in July 2011 was just over 240.5 million, an increase of 500,000 units over July in the previous year, and nearly equal to 2009 VIO. The highest VIO on record was achieved in July 2008, when more than 242 million passenger cars and light trucks were on America’s roads.

When Your Shop Is Worth Much More Than You Thought

Although every sale of a shop in which I am involved has its own unique set of circumstances, which makes my job both very interesting and very challenging, Cowden Automotive stands out as particularly memorable because I was able to demonstrate to the long-time owner, Paul Cowden, that his business was worth about three times what he had initially thought.

Case Study: Owner of San Francisco-based Import Service Shop Delighted to Discover Just How Valuable His Business is to Qualified Buyers
I sometimes share case studies of the clients I have been able to assist in my role as an aftermarket business broker and provider of intermediary and advisory services. I do that when I think the story will provide a reader in similar circumstances with new insights or helpful information.
In the case of Cowden Automotive, Inc., I acted in a consulting capacity assisting the owner and his broker in valuing the business, creating a marketing plan, finding a qualified buyer, and arranging financing for the sale.
Although every sale of a shop in which I am involved has its own unique set of circumstances, which makes my job both very interesting and very challenging, Cowden Automotive stands out as particularly memorable because I was able to demonstrate to the long-time owner, Paul Cowden, that his business was worth about three times what he had initially thought.
Needless to say, delivering that kind of good news to a shop owner is a rewarding experience. Discovering that the sale of his business would result in his retirement nest-egg being substantially larger than he had ever thought was a fitting tribute to someone who had spent his entire working career as a busy automotive service shop owner.

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