So much for the idea that Americans purchase a new car and flip it every three of four years.
New car buyers are holding onto their vehicles for a record amount of time, an average of almost six years, or 71.4 months, according to a study of car registrations by automotive research firm R.L. Polk & Co.
That’s a jump of almost 18 months since 2006.
One reason is that the cars are built better than previous generations of autos, so people can drive them for longer periods of time without getting hit for expensive repairs, according to Polk.
Automakers also have lengthened their warranties. Most new cars come with a three-year or 36,000-mile warranty. Volkswagen throws maintenance into the equation for the first three years, Toyota for the first two. Hyundai offers a five-year or 60,000-mile warranty and goes to 10 years or 100,000 miles on the powertrain.
The weak job market also adds to the length of ownership, Polk said. People who don’t have jobs or fear they might lose theirs don’t run out and purchase new $25,000 vehicles.
The expense of new vehicles also may be forcing people to keep them longer. Many new cars are sold with 60-month loans to keep the payments down. People wait to pay off the loan before buying a new vehicle. They may delay their purchase even longer so that they have some period of time without the burden of a car payment.