On the one hand, automobile sales, along with light truck sales, are up over the past few years. US automakers are financially, at last, feet on the ground, rather than drowning in the flood of red ink, as earlier in the Great Recession. One sees new passenger automobiles, which represent the largest segment of the motor vehicle market, everywhere, and many new luxury cars.
Nonetheless, I have another, competing impression. My impression is that for the majority of American households or automobile owners, buying a new automobile is not in their budgets. As I look around Southern California, from the inland cities to the coastal enclaves of wealth, I see many older cars on the road, with many of those cars showing wear and tear, paint worn off, unrepaired minor collision damage, damaged windows, that sort of thing. These older cars are symptomatic of depressed working class, youthful owners, black and Latino owners, and a strained middle class - all of the private sector. We are an above average household, yet our two cars are each ten years old, years out of auto payments. We hold onto them, because we don't want yet to tie ourselves to years of payments for new autos.
We need a way to evaluate the state of American automobile ownership, for what it tells us about the state of the national economy. We shouldn't assume that financial recovery for the US and US-based automobile manufacturing industry means that the average American household is doing better than three years ago. For instance, we should look at the average age of the passenger automobile fleet, at the distribution of age of cars on the road, at the age of cars owned by different social-economic classes. I have not done this research, but I think it would likely indicate that average American households are not taking on new automobile debt. This expectation is in line with the reluctance of households to buy new private residences; instead, planning to stay with renting or older, inadequate owned housing. We are not out of the Great Recession yet.