Old-car habit may have hit its peak

  • Article by: PAUL LEVY and DEE DEPASS , Star Tribune staff writers
  • Updated: January 18, 2012 - 6:10 PM

That old car is older than ever. But experts think more owners will turn in clunkers for new rides this year.

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Xena Huff, at Seward Co-op in Minneapolis on Tuesday, said she is satisfied driving her 1992 Mitsubishi Galant, which has 162,500 miles. Many owners have held on to vehicles because of economic worries.

Photo: David Joles, Star Tribune

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Eric Sandve's 1994 Plymouth Voyager has 246,000 miles on it. The engine and tires are from a junkyard, and the air conditioning quit years ago. But the cassette player sounds great.

"I'm a college student, I was laid off and I'm cheap," Sandve, 37, said Tuesday from Metro State University in St. Paul. "So, yes, I'm hanging on to this old car."

Sandve's 17-year-old car is older than most, but he's got plenty of company in driving something made before the turn of the century. The average age of U.S. cars and trucks hit a record 10.8 years in 2011, according to new data from the Polk automotive research firm. That's up slightly from the previous record of 10.6 years in 2010 as job security and other economic worries kept many people from buying newer cars.

As recently as 1995, the average age of a car was 8.4 years, according to Polk, which compiled the data from state vehicle registration rolls.

The trend may be slowly starting to turn. Vehicle sales rose 10 percent last year, capped by a strong November and December. Both analysts and car dealers see better times ahead.

Polk analyst Mark Seng also says that increased sales in the next couple of years will likely lower the average age of cars.

Bob Ryan, owner of the Ryan Auto Mall in Buffalo, Minn., sold 900 new cars and 1,300 used cars last year, which amounted to a 30 percent jump over the previous year. He predicted that sales will rise another 30 percent in 2012 as more people replace more jalopies.

"The age of the cars is over 10 years and those cars are just smooth wore out," Ryan said. "It's not uncommon for us to see 180,000 to 250,000 miles on cars. If they are worn out and the maintenance is too great, people are trading them in."

Paying a costly price

Just this week, a friend asked Xena Huff, 44, of Minneapolis, whether she has considered buying a newer car. Huff, a learning specialist, drives a 1992 Mitsubishi Galant with 162,500 miles. Though she's happy to be saving money, she knows a newer model would bring upgraded features.

Huff learned firsthand the dangers of owning an old car. She said that she and her husband were broadsided by a hit-and-run driver. Her husband did not survive the accident. They were driving a 1994 Mazda. It had no air bags, she said.

"It probably cost my husband's life," she lamented.

"Maybe I should look for a new car," Huff said. "Not a brand-new one, but one with newer features."

Some car buyers are beginning to feel it's necessary to upgrade those old beaters, said Tom Leonard, owner of Fury Motors in St. Paul.

"People have driven their vehicles for a long, long time and it's just time to replace and update," Leonard said. "We take in a lot of [trade-in] cars that really, quite frankly, should not be on the road any longer. Some have 250,000 miles on them and are ready to be put to rest."

Leonard said the old age of customers' cars and the need for a replacement vehicle helped his sales shoot up 45 percent in December.

A not so trusted, old friend

But some old-car owners are reluctant to part with a vehicle that may be temperamental but holds sentimental value. Lynette Nyman, 44, of St. Paul, wrote to the Star Tribune that she was "sad" to part with her 1992 Honda Accord recently. "Together, we had quite a journey," she said.

If customers decide to buy a used car rather than a new one, they generally will pay a premium for it now, because automakers slowed production so dramatically that there are fewer cars in the marketplace. In 2003, automakers made and sold 16.6 million vehicles. Last year they sold about 12.8 million.

Alec Gutierrez, a senior market analyst for Kelley Blue Book, said that many consumers held onto old cars and trucks because they were worried about sinking investments on Wall Street, plummeting home values or losing their jobs.

With national "unemployment starting to drop and the Dow stabilizing, consumers are finally getting back into the buying mind-set," Gutierrez said. "There has just been so much uncertainty over the last few years that a lot of consumers who didn't absolutely have to replace their vehicles have been waiting the wings to see how things would shake out."

In 2011, auto sales rebounded a bit to the 12.8 million figure. Many analysts expect 2012 to be better, with anywhere from 13.5 million to more than 14 million vehicles sold. But even 14 million is still below what industry analysts consider a normal sales rate of close to 15 million per year, and far lower than the U.S. sales peak of 17 million in 2005.

The Associated Press contributed to this report. plevy@startribne.com • 612-673-4419 dee.depass@startribune.com • 612-673-7725

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