I used to think that owning a 10-year-old vehicle was a wonderful financial accomplishment. It signaled frugality, discipline, and appreciation for what you have.
However, the latest average age of U.S. vehicles from an S&P 500 Global Mobility report shows Americans are keeping their vehicles much longer than ten years or buying older vehicles on average.
As of 2023, the average age of U.S. cars is 13.6 years and the average age of U.S. light trucks is 11.8 years. The overall total average of U.S. vehicles is an impressive 12.4 years!
Based on the ridiculous cost of luxury new cars and regular new cars today, it wouldn't surprise me if the average age of a U.S. cars continues to go up in 2024 and beyond.
The Desire To Drive A Vehicle Longer Than The Average
Here at Financial Samurai, if we want to build more wealth than the average person, we need to be more fiscally responsible than the average person.
Instead of saving only ~5% of our income like the average American, we save at least 20% of our income. Instead of only relying on one job, we earn additional money through side hustles, and so forth.
Given this desire to outperform, we should aim to drive our vehicles longer than the average 12.4 years in America. Spending too much money on a car is one of the top money wasters in this country. By extension, buying new cars too often is another.
We know the average new car price is almost $50,000, an absurd amount given the median household income is only about $75,000. We also know that the median retirement savings balance in America is only around $110,000. The money we spend on cars could be invested for our retirement instead.
Given the average age of U.S. vehicles has climbed to 12.4 years, to outperform, we should bump up driving our vehicles until they are at least 13 years. So long as the vehicle is properly maintained and safe, driving a vehicle for fifteen years seems reasonable.
The longer we own our cars, the higher our House-To-Car Price Ratio for financial freedom. Americans are spending too much on a car when they should be focused on building wealth through real estate.
Why The Average Age Of A Vehicle In America Getting Older
There are several factors contributing to the increasing average age of vehicles in America:
1) Improved vehicle quality
Vehicles today are generally built with better quality materials and components compared to previous decades. Advancements in manufacturing and engineering have led to more durable and long-lasting vehicles. As a result, cars can remain reliable and functional for longer periods, leading to an increase in their average age.
The Volvo 850 GLT, BMW M3, and MB G500 I owned in the 2000s all had many electrical and mechanical issues. Their problems are why I became friends with a mechanic.
2) Economic factors
The cost of new vehicles has been rising steadily, making it more expensive for many people to purchase brand-new cars. As a result, people are holding onto their vehicles for longer, opting for maintenance and repairs instead of buying new ones.
The cost of both used and new vehicles shot up during the pandemic. In some cases, you could have bought a new vehicle and sold it three years later for the same price.
3) Financing and leasing options
The availability of financing and leasing options has allowed people to spread out the cost of new vehicles over longer terms. This has led to individuals keeping their vehicles longer, as they continue making payments beyond the typical ownership period.
This type of financial engineering can be dangerous for consumers because it enables consumers to buy more car than they can comfortably afford. The same thing happened with the housing market, which resulted in a crash between 2007-2009.
4) Improved technology and features
Modern vehicles are equipped with advanced technology and features, such as improved safety systems, infotainment options, and fuel efficiency. As a result, incremental new car features don't make as big of an impact anymore.
I still remember being thrilled to go from inserting a CD in the dashboard to using Bluetooth to play music. Nowadays, almost every car has Bluetooth as standard. The same thing goes for backup cameras.
5) Reliability and maintenance
With regular maintenance and proper care, vehicles can easily hit 200,000 miles if so desired. If the average person drives 12,000 miles a year, that's 16.7 years of car ownership. Repairing a car is usually the more economical way to go.
The average age of a vehicle may also be increasing because the mass market is waiting for electric vehicles to improve in reliability. Personally, I've been considering getting an EV since 2020. However, every year I wait means better battery technology, more charging stations, and more reliable vehicles.
6) Greater fiscal responsibility
Americans are getting more responsible with their money. They are seeing luxury new car prices increase at high rates and are pushing back by owning longer.
In addition, more American see homeownership as a path to greater wealth. As a result, they are following my House-To-Car Ratio guide for financial freedom. Americans are getting long real estate and minimizing their car expenses as much as possible.
The Debate On Driving A Safe Car
One of the financial moves I made that reduced my stress after my son was born was buying a larger vehicle. As a new father, my desire to protect and provide for my family went into overdrive. Owning a compact car with paper-thin doors was no longer going to cut it.
My Range Rover Sport was born in July 2015. It is now about eight years old with no mechanical problems or failing parts. I've maintained the car on schedule. I also probably change my tires, brakes, and oil slightly quicker than the average person.
So long as my vehicle works, I do not see a problem driving it for seven more years until it is fifteen years old. By 2030, my vehicle will have roughly 80,000 miles on it given I drive about 6,000 miles a year. 80,000 miles is still nothing compared to the 130,000 miles I had on the $2,000 hatchback I drove in 1997.
I just wonder what type of better safety features I will forego by not changing cars sooner. 13 years is a long time for auto engineers to tinker. Hence, at the ten-year mark in 2025, I will have to really consider whether buying a new used vehicle is a good idea.
The Car Buying Plan For Now
As of now, I plan to buy a 2025 Range Rover in 2028. The latest Range Rover was completely redesigned and introduced for sale in 2022. Therefore, buying the 2025 version will help me skip some of the first-year bugs all newly designed vehicles go through.
Buying a three-year-old car from a private party is the sweet spot for getting the best bang for your buck. You skip the largest part of the depreciation curve, yet the car is likely still under warranty with a new-car smell. If you then hold the car for 10 years, you get a total car age of 13 before considering buying another.
However, I might change my mind in 2026 depending on the condition of my existing car, other new cars, and transportation alternatives such as self-driving cars. Waymo and Cruise will expand their self-driving offerings by the end of 2023. If so, I may end up driving even fewer miles on my existing car, thereby extending its useful life.
Finally, the lengthening of the average age of U.S. vehicles bodes well for the average American's personal finances. This is a bullish data point for the U.S. economy thanks to more disposable income and less car debt. Maybe I should be more optimistic about where we are in the economic cycle after all!
Loading ...Invest In Private Growth Companies Instead
Instead of buying a car that is guaranteed to depreciate in value, invest your money instead. Consider diversifying into private growth companies through an open venture capital fund.
Companies are staying private for longer, as a result, more gains are accruing to private company investors. Finding the next Google or Apple before going public can be a life-changing investment.
Check out the Innovation Fund, which invests in the following five sectors:
- Artificial Intelligence & Machine Learning
- Modern Data Infrastructure
- Development Operations (DevOps)
- Financial Technology (FinTech)
- Real Estate & Property Technology (PropTech)
Roughly 35% of the Innovation Fund is invested in artificial intelligence, which I'm extremely bullish about. In 20 years, I don't want my kids wondering why I didn't invest in AI or work in AI!
The investment minimum is also only $10. Most venture capital funds have a $250,000+ minimum. You can see what the Innovation Fund is holding before deciding to invest and how much. Traditional venture capital funds require capital commitment first and then hope the general partners will find great investments.
Reader Questions and Suggestions
Did you know the average age of U.S. vehicles is now over 12 years? How old is your vehicle and how long do you plan to drive your vehicle for?
For more nuanced personal finance content, join 60,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009.
My first family car was a Light Sky Blue 1975 Oldsmobile Delta 88 with a 455 Rocket engine. The car was an all-American metal beast, and the front bench seat rivaled any lazy-boy found in a modern living room. We buckled our child’s car seat between us in the bench front seat, and the back seat could easily accommodate 4-5 adults if we attended our local drive-thru movie theatre; as well as 4 or 5 more in the full-size trunk (without paying). On trips across multiple state lines, the kids slept on the upper back window deck, or constructed a fort by tucking a blanket under the front headrests and tucking it in behind the backseat bench – kids giggled for hours. Turning your head to check for oncoming traffic was the prominent safety device as well the turn signal on the steering column. On long trips, my kids would put their game board on the “hump” between the feet wells in the back and I could keep a cooler of cold beer in the front by our feet. We enjoyed traveling all across our country and never had an issue. It’s the same way I traveled when I was a kid and was the best of times.
I have a 2013 Honda Civic with around $34K miles on it that mostly sits in a garage. I’ve walked more miles than I’ve driven in the last ten years. I live within walking distance from grocery stores, an outdoor mall and various other businesses. I default to walking when I can do so. I live on the west coast and my car sits low to the ground which prevents it from potential theft of the catalytic converter, also the garage is a huge theft deterrent.
The former car payment, former student loan payment and raises are being funneled into retirement accounts and long-term savings. I don’t plan to replace my car until it is necessary to do so. I also have a terrific deal on rent and invest the difference between rent and the typical mortgage payment into investments. Because I’m single and make under $170K a year I don’t qualify for the average house in my area, which is around $1.25 million. I plan to buy a house in cash when I retire in an area with MCOL on the west coast further away from a major city.
Sounds like a plan! Walking is great. And if you find someone with a similar income, maybe you could buy your home sooner.
Sam, I am amazed that you continue to drive an SUV. It is my understanding that they are 17% more likely to result fatalities. After a terrible auto accident about 20 years ago I looked deeper into auto safety. The safest option is a 5000# sedan. AWD is a performance feature, not a safety feature. It seems that marketing department ads have lead to the thinking that an SUV will protect our families when the opposite is true. They put our children in harms way. Like you, we are SFO – Tahoe skiers so that drive over Donner pass was part of the equation. What do you think?
Sounds good. I will look into the 5000# sedan. How much do they cost and where can you buy them? Glad you survived your car accident. Please drive safe and defensive!
I am curious about this as well and hope that Pam will answer!
Is it 17% more likely for the SUV or the vehicle it hits, or pedestrian? Very few people would sacrifice safety for their own vehicle to make others safer. I applaud that you do.
In 2006 I purchased a 2003 Lexus GS 430 with 64k miles. It’s still my car today with 198k miles. I look at how many cars my friends have purchased in this time and appreciate the 15k purchase. With 2 kids the same age as your kids Sam i do consider safety more now. Problem is when I look at cars in the 25-40k range aside for some cool camera, lane changing assist feature I don’t think they are built better than my car. I’m probably wrong, cars made to crumble is part of their safety. Think I”ll consider a Rav 4 in the next 1-3 years.
Hi Sam
Another great blog as normal. We have recently bought two new cars within the last 18 months. We had an 18 year old sienna with 140,000 miles on it that just looked really run down. We replace it with a new Honda van for $50,000 traded the sienna for $5000 didn’t wanna deal with selling it. Our second vehicle was a sprinter van and we had a 13 year old dodge sprinter van that we now use for our business. Bought a new Mercedes sprinter van for $65k.
So the Hondas been fantastic the Mercedes had issues since day one. Purchased both during Covid.
I hate purchasing new cars but, reading your blogs about safety and just necessity, it is important to have a safe vehicle with a bunch of kids. Both purchases made sense. Currently very unhappy with the Mercedes purchase. Very happy with the Honda purchase.
I have four requirements: It has to start, not be embarrassing to be seen in, have working AC, and not need much of anything but recurring maintenance.
I used to buy new and get the top-of-the-line version for that model, leather seats, etc.
Then I drive them until they fail to meet my initial requirements. Current car is 14 and still seems fine. That is a new record.
I won’t buy a new car until after I retire and move to a less crowded location. What the roads and parking garages will do to new cars here would make me sad.
I have a 2014 Toyota Prius that I purchased in 2018. It’s now nine years old with 130,000 miles and doesn’t have any issues. I’m diligent with oil changes and usually opt to follow the dealership service center’s maintenance recommendations after I’ve googled and determined that it makes sense. I plan to keep this car until it dies, repairing what I can until the cost becomes to much, and a new car makes more sense. I do have a secret wish that this car will last until EVs are mainstream and charging them will not be an issue for long road trips.
We have three cars. It’s overkill for our family of four, but it is nice to have that 3rd vehicle b/c cars do breakdown and having that safety net is nice.
My wife drives a 2010 Fusion, I have a 2012 Civic, and a couple years back I bought a 2015 Silverado to haul things around for side hustle carpentry work. We own them all and have had to make some repairs on them over time. Sometimes it’s stuff I can do, but for the extreme tasks they go to the mechanic. I’d rather pay that invoice then be stuck with a monthly payment. Sadly the day is going to come soon where we have to get another new vehicle, but saving over time will help us deal with that cost.
It’s nice to have enough space to be able to own that many cars. At the same time, it’s nice to only have space for one because it forces you to be more efficient.
But having a back up car does provide for some peace of mind!
Safety features are important but at the same time an average of 1 in 67 Americans get into an accident each year. Out of every 147 accidents, 1 is fatal. Majority of these “fatal” accidents are due to DUI, speeding, and non-use of seatbelt. I know safety is of utmost importance when thinking of family members or yourself, but I honestly don’t even think about whether a car has the latest safety features as long as it has a seatbelt and airbag.
Glad you don’t worry about safety.
I’ve decided to just buy the safest car. I can afford to worry less about safety. Because even though the chances are small of dying or getting seriously injured, accidents happen all the time, and they can happen to people who are good drivers. Hence, why risk it if you have the money.
What car you own and what year is it?
I get it. But really, SUVs are the way to go since they’re much safer in the event of a collision compared to a sedan. I drive a 20+ year old sedan and my wife drives a somewhat newish SUV.
Love this. I still drive my 2012 Acura TL SH-AWD. 163,000 miles on her. The only thing that made me consider trading her in is for some reason the bluetooth is starting to get wonky with newer phones. At this point though, I’d rather drive her into the ground and get at least 200k out of it. The way I see it, if I have to spend even 3-5k on parts and consumables (CV joints, pads/rotors, etc.) it’s still FAR cheaper than buying an altogether new vehicle. I also love that 3 year rule for buying used from a third party. I’ll definitely have to use that one Sam!
Traded my 2018 Toyota Avalon with 38000 miles for a brand new Kia K5 . With trade in it cost me $6000 difference for car. New car has more safety features and gets average 34mpg. My wife loves the new car so how good is that.
I just saw new Toyota Avalon and it looked really really nice. It’s funny, but now I feel a five year old car is so new that I wouldn’t ever trade it in. Whereas in my 20s, I would gladly trade in a car every 1 to 3 years. I just don’t wanna deal with the hassle of changing cars anymore.
I’m glad your wife approves! That’s the most important thing.
Oh wow I’m impressed the length is that high. As long as a car is safe and reliable I’m happy to own it for over 10 years. But I can see the allure of getting a new-used car sooner if theres a significant number of new safety features.
It still freaks me out to see driverless cars going around everywhere in SF but it’s pretty darn amazing they have the functionality to do that. Technology can do some impressive things!
Sam,
You should seriously look in to getting a cargo ebike. Living in mild temps with 2 kids it’s a wonderful mode of transportation and way fun for all. Look into urban arrow or tern GSD. Spendy but cost to operate are ~90% cheaper than driving. Also, helps stave off dad-bod ha. I ride about 2500 miles a year in Denver, and have a serious aversion to driving now, so much less stressful and faster for errands. You start to look at people in traffic and feel sorry for them ha. Also, side benefit …lots of new content for your site!
I second this. I bought a cheap Lectric xp and equipped with a child seat. I was able to take my kid to school each day on protected bike paths 95% of the way. It saved me serious amounts of fuels and wear on my truck and was way more fun. Plus riding a bike path is probably much safer than driving on a city road. I wish the US was set up to make biking cover 90% of trips. It would unlock so much wealth that is squandered on vehicles and oil imports each year.
Yes, cargo and utility ebike have been a game-changer in our household as well. No more waiting in car dropoff line at school. No trip to gas station, and dirt cheap maintenance cost and insurance. Much more fun to ride than driving an SUV.
Got the cheap one from Rad and has been more than good enough – they are solidly made, but eyeing the more expensive models as well. Problem is the garage space…
For me, the issue with EV’s is the time it takes to recharge them-30 minutes at best vs. 5 minutes to fill up with gas. Also, the availability of charging stations. Once more people have EV’s, will finding a station be like finding a parking spot?
But at least you can charge your EV at home and not have to go to the gas station. In the city, range is not as big of a deal.
But yes, if charging station supply doesn’t keep up, then the wait time to charge will be even longer.
It’s not at all an issue for a daily commuter car. We probably go on road trips outside of a 300 mile range twice a year maximum. You can charge an EV overnight on a level 2 charger with ease. We only use a Level 1 110 volt wall outlet and it gives us enough juice for our daily 40-50 mile commuting needs.
I drive 2005 subaru legacy wagon that just hit 200k. I have done all the maintenance myself and have all the receipts. I have a 2005 honda Odyssey with 185k miles we bought when my son was born 13 years ago. It had 50k on it. I also have a 1996 gmc pickup I bought off my dad for 1k and put about 2k into. It has 140k and I use it to pull my boat and haul my lawn equipment and lumber to my various rental properties. I take it as a point of pride to get over 200k out of my cars and feel like I can get 300k from both the subaru and the honda.
Those are impressive miles, especially for how many cars you have!
I just think about the other components, like the congealed airbag that needs replacing after 10 years and whatever else that might be rusted and compromised etc.
In Sept 2020, privately sold 2007 Honda Odyssey van (bought new) because my wife didn’t trust the vehicle not stranding her after some battery incidents caused non starting – otherwise the van was still running great despite it’s 140K miles (highest miles vehicle I ever had). Bought a new 2020 Chrysler Pacifica plug in hybrid taking advantage of excess solar production on house and crazy good discount + rebates + state and federal credits (over 18K off 51K MSRP).
In March 2021, privately sold 2015 Mini Cooper (bought new) because it was reaching the point of high risk of costly service (based on other Mini Coopers) at BMW prices. Still had excess solar production at house (which paid out at $0.05 per kWh), so found a brand new 2020 Hyundai Ionic plug in hybrid for an again crazy good price (31.5K MSRP, after discounts, rebate, and state and federal tax credit it worked out to 19K).
Both plug ins are seeing about 80% of use being electric, which due to my excess solar production equating to roughly lost payout of $0.44 per charge on the Ioniq for about 35 miles travelled, and $0.59 per charge on the Pacifica for about 29 miles travelled.
Then finally, in October of 2022, I privately sold my 2001 Explorer Sport Trac (bought new in 2001, and only 69K miles) because it would not tow a trailer (needed for animal evacuation in case of a CA wildfire), and purchased a 2022 Ford Ranger Lariat (2WD, tows 7500 lbs). My deal here was still extremely good – ordered from out-of-state dealer [who offered 3% below invoice for orders] and ended up at 30.4K price vs a 36.5K MSRP, where CA dealers were MSRP + 3K or more. Oh, and even better is that Ford had 0.9% APR 36 month financing at time of order that was still honored at delivery time – so rather than pay the planned cash / no finance, I took the loan and stuck the 30K in a 5 year brokered CD at 5%.
All vehicle prices were plus tax, license and registration fees.
Other than two year old used rental car purchase 20 years ago, I’ve always bought new and kept cars for six or more years. And with a rare exception, I’ve always sold privately vs trading a vehicle at a dealer. When I take the difference of price paid (without tax and fees) vs the private sales price, I’ve been able to keep it between $1000 (the 2001 Explorer Sport Trac) and $2400 a year depreciation cost for the car ownership — which to me is doing pretty good. Part of the key is not needing to be driving super fancy high priced vehicles. Given these costs, I prefer to buy new and hold for a significant number of years.
Retired as of last year — so expect each of these vehicles to be kept 10+ years.
Cool. Did you have three cars at one time at one point then?
I have trouble going with more than one car because it means more fees and maintenance. We need to use Uber more. Less tickets too!
Yes, we are a three car family of two individuals. But, five dogs, a dozen sheep, and chickens. Always had a (small) truck since moving to CA 30+ years ago – once you have a truck you tend to find it’s useful to have truck. The Pacifica van always has two dog crates (unless you need to haul something) and is my wife’s dog hauler. The Hyundai (and before Mini Cooper) was mine – to/from work with good mpg. And the Ford Ranger as mentioned earlier now is the hay / trailer / haul lumber / etc vehicle.
So been a three car family for 30+ years (mine, wife’s, truck), and a four cars for son age 16 to 22. But we’ve also been on one acre 30 years, and now 10+. If I lived in a “city” environment, then this would be too many parking wise.
But fortunate to retire to 10+ acre property (raw land purchased 2017) + new 2020 house build (completed just before Covid) + 2021 barn build (for the sheep).
Something went wrong retirement wise – upsized vs downsized, lol. But all the land and upkeep (and the weeds with this years rain) keeps me active and moving! It’s all good.
Once your kids reach school age and start various kinds of activities, you will have to have two cars because they often have separate activities at the same time. Then one day you will find yourself get a third car because it became really difficult to handle two kids’ busy schedules with your own work and side hustles. So you will need an au pair who uses the third car to handle on kid, your wife handles the other kid with one car, and yourself handle all the house chores, rental chores etc. with one car.
Life get busy quite quickly…
As someone who used to be a mechanic professionally, I would encourage everyone to get a basic knowledge about how cars work and what they need to keep running. It will help you avoid thousands in overpaying for maintenance and repair recommendations.
I recently took my wife’s 11 year-old minivan in for a minor service, and they recommended over $7k worth of repairs. I knew it was all over-recommended and declined the repairs. I’m wondering how many others would have just sighed and said yes.
$7K in repairs for only an 11 year-old minivan? That seems excessive. I wonder if it would have been better to sell when it was 10 years old then.
Could you have worked on her car and saved moved given your previous profession? Or is there too much equipment that’s needed?
All the recommendations were either mileage-based assumptions or minor leaks that requir a lot of labor. They were trying to make the car showroom new when all I really need is for it to start and run reliably.
I’ll perform any repair myself, so long as it doesn’t involve oil or gasoline.
I drive a 23-year old Chevrolet compact car. The car has 113,000 miles and still runs well. I’ve extended the car’s lifespan by taking public transit for many years. Now with remote work, I drive even less than before.
We got our car right before our son was born. It’s still working very well. We put about 6,000 miles on it every year so low mileage. I don’t really want to get a new car because we park in the street. All the cars are beaten up. Lots of dings and dents. Why get a new car when it’ll be banged up soon? We’ll probably get a new car before we move to CA in 5-6 years. No sales tax in OR.
Just make sure you use it in Oregon for at least 12 months before moving to California, otherwise you’ll owe California sales tax on it! https://www.cdtfa.ca.gov/formspubs/pub452.pdf
You moving to California? Welcome!
YEs on the dents and digs. Always happens at the grocery store. Oh well.
It’s why I don’t want to buy brand new too. Hurts more when it gets dinged.
I think the issue here is that mass hasn’t decided when to transition to EV. Most folks just want a ride that’s reasonably priced and above all, reliable. Teslas are common now, but they have notorious quality issue as well as reputational issue with the current CEO – in that sense, it’s no different than other American car manufacturers.
All reasonably priced EVs are from companies with reliability issues, and older, trusted brands are still catching up to newcomers with upper-tier models (in 80-100k) to make up for the cost. There just aren’t good choices out there. Once that’s out, I think the average car age will start to go down.
That’s a great point! I have been patiently waiting for the reliability of electronic vehicles to improve. I am still on the fence today, but maybe not so much in 2026 when it’s time to get another vehicle potentially.
I don’t mind waiting for the battery to last longer, technology, and the charging stations to become more ubiquitous. Every year there are improvements.
I am thrilled that they will be safer self driving technology within 12 years, when my kids become driving age. I just don’t want impetuous teenagers to drive. I’m too traumatized by what happened to my teenage friends.
I don’t get the concept of getting an ev to save money on gas. I drive 10000 miles per year and get 34 mpg on my car. At $5 per gallon that’s $1500 per year. My car insurance doubled this year and cost me about $1500 per year. I can’t see the extra upfront cost to buy a $50000+ EV vehicle.What do you think.