Number Of Vehicles Using U.S. Highways Expected To Drop; Scrapped Cars Likely To Outpace Rate Of New Purchases

19 December 2008
Vancouver Province
Copyright © 2008 Vancouver Province

Julia and Evan Campbell, a two-car couple here, will soon become a one-vehicle family.

The registration on their 13-year-old Ford Ranger expired last month, and to save on insurance, fuel and fees, they plan to sell the pickup and rely on the Boston region's public-transit system and their Honda CR-V SUV.

"Gas prices have plummeted, but that's definitely not going to last for all eternity," said Julia, 31.

The number of cars, trucks and buses on U.S. roads may shrink for the first time since the 2002 recession because of decisions such as the Campbells'. Automakers may sell just 11.7 million cars and trucks in the U.S. next year, according to General Motors Corp.'s Nov. 7 estimates, and if last year's scrap rate of 13 million holds, drivers will be pulling vehicles off the road faster than they're buying them.

"With everything happening, it's very likely the fleet will shrink next year," said George Magliano, an analyst at IHS Global Insight Inc. in Lexington, Mass.

The number of registered vehicles has contracted only nine times in the past century, and a 10th decrease would reflect more pain for GM, Ford Motor Co. and Chrysler LLC and smaller tax collections for road maintenance.

On the other hand, the decline may unclog some freeways. Discarded autos are either sold for salvage or to motorists junking even older vehicles.

If GM's U.S. forecast is right, the industry will sell the fewest cars since 1982 next year. Last year's scrap rate was determined by subtracting the increase in the number of vehicles on the road between 2007 and 2006 from 2007 sales. The number of registered cars and trucks in 2007 rose by 3.1 million to 247.3 million, according to Federal Highway Administration data, and 16.1 million vehicles were sold in 2007, according to Autodata Corp.

Gasoline prices, which peaked in July at a record $1.09 US a litre for regular, helped cut vehicle miles travelled by 3.3 per cent, or 161.1 billion km, between October 2007 and October 2008, according to the highway administration.

Fewer miles driven means less gasoline purchased, cutting funds available to fix U.S. roads. The $43 billion Highway Trust Fund needed an $8 billion bailout in September.

 

Man thats the best news I have heard in a while. I wouldnt mind fewer cars on the roads. It will be cleaner for the environment, and better for the people who can still afford to be behind the wheel. I dont think its gonna be a huge number, but a significant number

 

I know a few people ditching one of their vehicles to save on costs.

 

Some people are also committing insurance fraud....setting fire to their vehicles, or junking them and reporting them stolen, just to collect on insurance. It's risky, and carries a possible prison term, but people still do it.

 

sweet... maybe socal won't have so much gridlock...

 

SoCal, the car capital of the US, which is the car capital of the world? One can hope... =)

I lived in San Diego for 4 years and the traffic did get messy. I'm back in the SF area and it isn't much better.

 

b/c looking back, they're forecast in the past has been a reliable source?

 

Having gas at $4.50 a gallon last summer made a difference, too. I noticed traffic on local roads here (normally the second-worst traffic area in the country outside of CA) was off significantly. It has picked WAY up again since gas dropped.....especially with the holiday-shopping season this December.

 

Have to agree on the bay area. I haven't seen much reduction in traffic here other than when gas was edging $5/gal. Less cars would be great with me. But you have to wonder about what will happen? We had gas go to just about $5/gal and when it came down, we are now getting serious on the downturn, unemployment in Cali is quickly in the 8% range.

Gas is around $2/gal here, went up about 0.20/gal in the last two weeks but if we stay in this range or less and instead of having a 50% runup from Jan to Aug that we have had for the last couple of years it were to drop to say 20% increase, I wonder if all these predictions of the abandonment of cars will hold? Even though I am a strong proponent of more fuel efficient vehicles, might be an interesting time to have Obama/Congress doing product planning for GFC if gas stays in this range for a few years. At the prices for gas now, Prius are piling up on local Toyota dealer lots again.

 

More old cars being dumped and less new cars being bought, sounds like a good news for the earth and the commuters.

 

somehow i doubt atlanta's traffic will get much better.

 

Ever wonder why this winter is so frickin' cold & snowy? Plant closures, record layoffs, flight reductions, bankruptcies, even snow in LA and baby boomer attrition are jointly contributing to a vast reduction of greenhouse gas emissions, allowing the planet to return to pre-80s climates. If this keeps up, and there no evidence to the contrary, we may well see ten foot snowbanks in our lifetimes once again. Pure speculation, but it's possible...

 

i personally doubt climate changes that fast... we can't even time el nino correctly.