Average age of vehicle fleet

The average age of registered vehicles is expected to hold steady in 2024-25, remaining at 11.4 years. Weak consumer sentiment and ongoing cost-of-living pressures are deterring many consumers from new car purchases. While overall motor vehicle prices remain high, recent increases in supply and greater discounting in some segments have eased price pressures slightly, helping to stabilise the average age of the national vehicle fleet in 2024-25.

A variety of different vehicle types are taken into account when calculating the average age of the vehicle fleet. Passenger vehicles are expected to account for over 70% of total motor vehicles in 2024-25, causing the segment to have the largest influence on the fleet's average age. Passenger vehicles' average age has exhibited the fastest increase in recent years, including a 6.5% rise between 2020-21 and 2023-24, putting upwards pressure on the age of registered vehicles in Australia. Motorcycles have also faced a similar trend, with average age increasing by 6.4% over the same period. This strong growth in passenger vehicle ages has contributed to the average age of motor vehicles witnessing its strongest growth in over three decades. This growth in the age of the total fleet has been exacerbated by increases in the average ages of light commercial vehicles, heavy rigid trucks, articulated trucks and buses over the past five years. On the other hand, light rigid trucks, often used in freight transport, exhibited a decline in average age over the past five years. This trend is largely a secondary impact of the growth in demand for online shopping, causing freight and shipping requirements to expand significantly during the period.

New passenger vehicle sales are the most significant factor lowering the average age of registered vehicles in Australia. The length of the vehicle replacement cycle affects new vehicle sales, with consumers and businesses extending the cycle and delaying purchases during periods of economic weakness and shortening the cycle during periods of strong spending power. Over much of the period, new vehicle sales plummeted, resulting in the climb in the average age of vehicles. Lockdowns, restrictions and supply chain disruptions all delayed vehicle replacements during the pandemic period, while economic headwinds, growing cost-of-living pressures and weak consumer sentiment have limited post-pandemic growth in new car sales. Overall, IBISWorld forecasts the average age of registered vehicles in Australia to increase at a compound annual rate of 1.9% over the five years through 2024-25.