Economy, improved quality keeps vehicles on the road longer
The Atlanta Journal-Constitution
Published on: 04/09/08
Call car repair shops and each one has another story about the economy's impact on their business.
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Joey Ivansco/AJC |
| Dave Brinkley, a technician at Layfield Motors in Atlanta, uses a diagnostic tool to help determine a problem on a 1998 Plymouth Breeze in for repair. Americans are keeping cars longer than ever-- 9.2 years on average-- so that means many drivers are often more open to having big car repairs completed rather than trading in for a new or newer car. |
An Atlanta shop supervisor says people are writing bigger checks for car repairs to stave off buying a new vehicle. A Hampton service manager says people are trying to save money by having used engines and transmissions installed — even against his advice. A Marietta shop owner says people are putting off needed repairs until their vehicles are not drivable.
All three see one standard: Drivers are hanging on to their cars longer.
The figures bear them out. The median age of passenger cars on American roads last year was 9.2 years, nearly a year older than the 8.3 years seen in 2001, according to the automotive consulting firm R.L. Polk & Co. The median age of light trucks in 2007 increased to 7.1 years, a year older than the 6.1 seen in 2001.
There are several reasons America's fleet of 248 million vehicles is aging, said Chuck Parker, publisher of Automotive Digest, an online trade publication.
First, cars last longer, he said. Engines are better built and more efficient. More people are buying used cars because they are more sound than in the past. Then there's the economy.
"Buying a vehicle because it looks good is less and less of a reason," Parker said. "People are looking for utility, for cars to last. People are fighting to keep their kids in school and pay their mortgage."
He estimates there will be about 15 million new vehicles sold in the U.S. this year,
1 million fewer than last year.
The benefactors of the trend "are the local, independent Joes, the car repair shops on the street," Parker said.
Nap Mack, a shop supervisor at Layfield Motors in downtown Atlanta, has seen cars get older during his 35 years at the business.
"People used to get rid of their cars at 100,000 miles, but we're seeing them keeping them for 120,000, 130,000, 140,000 and more," he said. "They're keeping closer track [of maintenance] because they know they're going to keep them longer."
Mack said car owners increasingly are deciding to make big repairs like engine and transmission replacements to forestall having to buy a new car.
Experts say there is no easy equation for deciding the cost of yet another repair vs. car payments of a new car. It's simply a calculation each driver must at one point make.
"The depreciation of a vehicle, even with high gas prices, is the highest cost of operating a vehicle," said Tom Webb, chief economist for Atlanta-based Manheim, the world's largest wholesale vehicle auction firm. (Manheim, like The Atlanta Journal-Constitution, is owned by Cox Enterprises.)
Shane Mitchell, service manager for Russel's Automotive in Hampton, said some owners are choosing to make repairs that cost more than the vehicle is worth.
"If you like the car and trust the car, you're good to [repair] and keep the car," he said. "If you have a car worth $3,000 and have a bad transmission, you have a $200 car. Sometimes [fixing the vehicle] is the best of two evils."
"The biggest thing I've seen is people don't have the money for good products," Mitchell said. "We put in more used stuff the last year than ever, even though I advise against it. But with people's credit hurting, they don't have a choice."
Jesse Day, owner of Day Brothers Automotive near the Big Chicken in Marietta, said business has fallen off the past six months to "slower than I've ever seen it. I guess [customers] are taking care of the emergencies and that's it."
Parker, from Automotive Digest, said car dealerships are cluing in on the changes in the buying public.
In past years, dealerships made much of their profit from financing and selling insurance for new cars. Today, "the two parts of the dealership benefiting are the pre-owned area and the service shop."
Terry Cullen, owner of a Chevrolet dealership in Jonesboro, agreed, saying the dealership's used vehicle lot, parts department, body shop and repair center all must pick up the slack.
"People are uncertain about their jobs, so they'll put off big purchases," Cullen said. "In the past, people would say, 'I'm tired of fixing it. I'm buying a new car.' Now, they'll fix it one more time."
Mike Hardy, whose family sells Chevrolets, Buicks and Pontiacs in Dallas, said the repair shop and "pre-owned lot" are helping keep the business afloat until new car sales improve.
"We've been on this roller coaster before," said Hardy, who added that there are worse industries to be in these days. "We're not in the boat business with the drought or in the house-building business."
'I'LL KEEP THE JUNKER'
Carmakers announced a drop in sales from the previous March
• General Motors and Chrysler, down 19 percent
• Ford, down 10 percent
• Toyota, down 10 percent
• Nissan, down 4 percent
• Honda, down 3 percent
Source: AP
• About a third of 1966 models were still rolling 13 years later.
• But two-thirds of 1996 models were on the road 13 years later.
Source: Tom Webb, Manheim
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