American drivers are holding on to their new vehicles longer than ever -– to nearly six years -- a new study says.
Research firm Polk, citing data compiled in September 2011, said U.S. consumers kept their new vehicles an average of 71.4 months -- up 4.7 months from March. Both the length of ownership and the rate of increase set records for the study, which Polk first conducted in 2001.
The data reflect growing reliability of new cars as well as consumers hindered from making another purchase because of the uncertainty surrounding the economy in recent years.
The longer terms of ownership combined with a vehicle fleet already at a record-high age create more business opportunities for manufacturers and their dealers, Mark Seng, global aftermarket practice leader at Polk, said in an interview.
"Traditionally most older vehicle repairs go to the independent aftermarket but this is an opportunity for manufacturers to get in on that as well," he said.
Used vehicle owners held on to their purchases for an average 49.9 months, also a record, up from 47.5 months six months before.
The combined length of U.S. vehicle ownership stood at a record 57.0 months as of September, a gain of 3.1 months since March, said Polk, which uses registration data to conduct the study.
Since the U.S. financial crisis began in the third quarter of 2008, overall vehicle ownership terms have increased 23 percent, Polk said.
Another study released by Polk in January this year found the average age of light vehicles on U.S. roads had reached a record high of 10.8 years in 2011.
U.S. light-vehicle sales plunged to 10.4 million in 2009 after spending most of the decade above 16 million units. The U.S. total recovered to 11.6 million in 2010 and 12.8 million last year. Polk’s analysts aren’t expecting sales to return to 16 million units until 2015
In today's study, Polk noted conservative spending and a still-weak job market in addition to relatively high unemployment rates as contributing factors for why consumers are keeping their cars.
"Unemployment rates continue to be high and we expect many consumers will suffer from lingering effects of the downturn, further contributing to longer ownership trends," Seng said in a statement that accompanied the study.
Seng, in the interview, said the lesson for dealerships is two-fold: the first for its parts and service operations to nurture more business and the second is for the retailers to learn ways to build loyalty with those customers.
"Dealerships need to figure out how to keep that relationship with their customer throughout the life of their vehicle," Seng said. "They need to maintain that loyalty with the customer on the service side of the business."
Seng said Polk finds that brand loyalty diminishes the longer they hold on to their car, especially when consumers choose longer leasing periods and warranties that do not run the entire length of that lease period.
"Rather than marketing to someone in their third or fourth year, it might be more beneficial to market to someone in their fifth or sixth year," he said. "It is real important for dealerships to track the length of ownership to help determine when their new car buyer might be in the market again."