Has America hit peak cars?

ScreenHunter_325 Nov. 20 09.14

By Leith van Onselen

In what could be a bellwether for the US economy and its struggling car industry, Americans appear to be losing their luster for cars, driving less, obtaining fewer licenses, and using less gasoline.

The below charts from The Atlantic illustrate the situation beautifully, suggesting that the US might have hit “peak cars”.

First, at the height of the housing bubble, there were just over two registered cars on the road per household, whereas as at 2011, there were just under two:

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Second, due to the rising population, the total number of vehicles on US roads has started rising again, although families are obviously not buying as many vehicles as the bubble years:

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Third, the average number of miles traveled has fallen 9% since the mid-2000s peak:

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With total vehicle miles also lower, despite the growing population:

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Finally, you would have to go back to the Reagan era to see annual fuel consumption this low on a per-driver basis:

ScreenHunter_330 Nov. 20 10.55

As noted by The Atlantic, we don’t know for sure whether these changes are permanent or as a result of the post-GFC recession. But with the economy and housing market unlikely to return to bubble-like levels of the mid-2000s, we could very well have past peak car use in the US.

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Unconventional Economist
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  1. One of the most common misapprehensions about increased vehicle miles traveled as an economy develops, is that the same people are driving further and further. It is not this at all – it is more and more people getting to drive at all. Women entering the workforce. Poorer people being able to afford low-price used cars that are still reliable. Larger numbers of elderly driving everywhere. Younger people becoming independent.

    It has always been likely that saturation of some kind will be reached.

    There was a very interesting correlation unearthed by Willis Eschenbach and posted here:


    Lots of comments too, some of them from some quite highly-regarded analysts including Todd Litman. Basically the current downturn in VMT can be explained by pump prices and average incomes. Litman does not like this……

    The people at the Atlantic, like Litman, like to see “a trend to high density living and public transport use” in every ripple in the data.

  2. It’s 100% post-GFC recession and even these numbers are fake. There has been a bubble brewing in sub-prime car finance to prop-up the automakers who all suffered enormously during the peak of the GFC.

    On a recent visit to the US I could hardly believe how cheap all the vehicle finance (mostly leasing) deals on offer where..

    $200 a month will get you a brand new – top of the line – car (for 36 months) easy!

    • “$200 a month will get you a brand new – top of the line – car (for 36 months) easy!”