What do drivers do when the economy goes south and they’re not willing to take on new debt? They drive older cars.
New vehicle sales took a turn for the worse in 2009 as they went down a full 21 percent. At the same time, older car sales went up. And while new car sales are on the rise again, it’s more affluent consumers who are making those purchases. Consumers on the lower end of the financial spectrum are still driving older cars.
How long will this trend continue? It will likely continue until the economy is fully recovered and auto drivers feel comfortable heading to their dealer’s finance department again.
But it isn’t all about the economy either. Older cars are actually in better shape than they were 20 years ago. They’re lasting longer.
People don’t mind driving older cars as long as they’re reliable. When you can purchase a vehicle with 150,000 miles on it and keep your maintenance costs low enough to keep the car on the road, then driving an older car isn’t an unattractive option. That’s why many auto drivers have opted to keep driving their old reliable vehicles and not take on any new auto debt.
One consumer said he was quite happy to be driving a car that was paid off. It was the first time since he was 18 years old. He’s now 41.