This Week in Car Buying: Average car age hits 11.5 years; Pricey Pickups; Tesla's incentives; 2015 Dodge Hellcat orders cancelled
A study by IHS Automotive reports that the average age of American vehicles has climbed to a record 11.5 years and the number in operation has hit a new high of nearly 258 million units. The fleet increased by 5.3 million or 2.1 percent in the last year alone.
"As long as we have tracked average age, it has gradually risen over time due to the increasing quality of automobiles," said Mark Seng, global aftermarket practice leader at IHS Automotive. "For the five to six years following the recession, however, average age increased about five times its traditional rate, which we attribute to the nearly 40 percent drop in new vehicles sales in 2008-2009. We're now seeing average age begin to plateau and return to its traditional rate of increase as consumers have recovered from the great recession and have begun buying new vehicles again."
Still, owners are holding on to their cars longer than ever before. That, combined with the fact that new car registrations outstripped scrappage rates by 42 percent, has led to a larger and older vehicle fleet in the U.S. overall.
IHS Automotive also found that the average new car owner keeps a vehicle 77.8 months, longer than ever before. A typical used car owner holds onto a vehicle for 63 months on average.
The recent announcement that Ford plans to offer a 2016 F-150 Limited Edition priced upwards of $60,000 and may top out above $70,000 has turned the spotlight on this little known segment of high-end trucks with prices that rival German luxury sedans and SUVs. Among the vehicles cited by Automotive News as leading the pack in luxury haulers were the 2015 Nissan Titan SL 4x4 Crew Cab Heavy Metal Edition, which starts at $49,275; the 2015 Toyota Tundra 1794 Edition 4x4 Crew Max at $50,110; Ram's 2015 Laramie EcoDiesel 4x4 Long Bed at $62,265, and the 2015 GMC Sierra Crew Cab Denali at $64,155.
The 2016 Ford F-150 Limited will be positioned above the current 2015 Ford F-150 Platinum SuperCrew, which has an MSRP of $65,710.
Tesla has joined other mainstream automakers in offering incentives, however, in typical fashion for the EV company headed by Elon Musk, there's a twist. The spiffs go to owners of Teslas who recommend others as well as the buyers of the Model S referred to the automaker.
Viewed primarily as a word-of-mouth program, owners who refer prospects that ultimately purchase a Model S will receive a credit worth $1,000 towards service, accessories or their next Tesla , while the buyer gets a $1,000 discount on their purchase.
Musk said the program has two goals, the first being to lower the current $2,000 cost of selling a Telsa and also, to a lesser extent, provide a way to promote the brand through the referral program in markets where Tesla is prohibited from directly selling cars through factory-owned outlets.
In addition to the $2,000 in incentives, owners who refer five or more buyers will get an invitation to next year's opening of the Nevada battery Gigafactory and an opportunity to buy a limited-edition "Founder Series" of the Model X with a $25,000 discount.
Dodge cancels remaining 2015 Hellcat orders
Even though it has about 900 orders for 2015 Dodge Chargers and Challengers equipped with the 707-horsepower supercharged Hellcat 6.2-liter V8, the division is cancelling them and ending soon the 2015 model production in order to get a jump on the 2016 model year, in which output of the vehicles equipped with the engine is expected to double.
Those who had pending orders will be given a voucher that will enable them to buy the higher-priced 2016 model at the 2015 MSRP. One of the reasons for the move was the fact that dealers were taking orders far in excess of the number of Hellcats Dodge said it was capable of producing. Dealers will be given allocations for the hot-selling models based on their total unit sales along with specific numbers on the Challenger and Charger models they will receive and will not be able to take orders above that figure. And if the vehicle doesn't sell in a timely manner, which would be the case if there's an excess markup on the price, it could affect the number of Hellcats the dealer could expect to receive in the future.
Sources estimate that Hellcat production could double from around 4,000 units in 2015 to 8,000 in 2016. In explaining the cancellations, Tim Kuniskis, Dodge's top exec, told Automotive news that "for the 2016 model year, we're starting fresh."
As the 2015 model year winds down, manufacturers are announcing model changes and pricing for 2016. Among the eagerly awaited changes to GM's new midsize trucks is the addition of a diesel option. Chevy announced first that its 2016 Chevrolet Colorado will offer the new Duramax turbodiesel followed a day later by its sister division giving out pricing and details on its 2016 GMC Canyon with the new powertrain option.
Toyota's luxury division will be spiffing up its 2016 Lexus IS sedan lineup with a new turbocharged 2.0-liter engine as the base powerplant as well as tweaking the 3.5-liter V6 to make more power.
We also had the opportunity to drive the 2015 Mini John Cooper Works Hardtop, which also has more power than the model it replaces with only a $500 bump in list price to $31,450.