3 Auto Stocks to Capitalize on Aging U.S. Vehicles

Industry Overview - The average age of U.S. vehicles reached a record 12.4 years in 2024, marking a two-month increase from 2023 and the seventh consecutive year of rising vehicle age [1] - The aging vehicle population is driving increased demand for repairs and maintenance, creating opportunities for companies in the aftermarket and vehicle service industries [2] Factors Driving Vehicle Longevity - Advancements in technology have improved vehicle quality, allowing cars to last longer [3] - The high cost of new vehicles, with an average selling price exceeding $45,000, is causing consumers to delay new purchases and extend the lifespan of their current vehicles [4] - Uncertainty regarding the future of electric vehicles (EVs) is leading consumers to hold onto their existing cars longer [4] Key Insights from S&P Global Mobility Report - Over 110 million vehicles, nearly 38% of the fleet, are entering the prime range for aftermarket service (6-14 years old), expected to grow to 40% by 2028 [5] - The U.S. vehicle fleet reached 286 million vehicles in operation, a 2 million increase from 2023, with a notable shift in age distribution [6] - Vehicles aged 6-14 years and older will account for about 70% of the fleet over the next five years, boosting aftermarket service opportunities [7] Company Analysis Rush Enterprises - A leading provider of solutions to the commercial vehicle industry, Rush Enterprises has over 150 locations and experienced healthy growth in aftermarket demand [8] - The company has increased its payout seven times in the last five years, with an average annualized growth rate of 30.4% [8] - Rush Enterprises holds a Zacks Rank 1 (Strong Buy) with positive EPS estimate revisions [9] Dorman Products - Dorman is a key player in the motor vehicle aftermarket, focusing on replacement and upgrade parts, with a strong balance sheet and manageable debt-to-capitalization ratio of 29% [10] - The company is witnessing northbound estimate revisions for sales and EPS, indicating growth potential [11] Genuine Parts - Genuine Parts has strengthened its position through acquisitions and efforts to improve supply chain efficiency, with a dividend increase representing its 68th consecutive annual increase [12] - The company is also experiencing positive estimate revisions for sales and EPS, indicating growth prospects [13]