And miles to go before we sleep or trade in the clunker.

The average age of cars and light trucks in the US has reached a record high of 12.6 years in 2024, up by roughly two months from last year, according to a new market analysis. Changing the oil every 3,000 miles and regular inspections are a lot cheaper than springing for a new ride.

Old Reliable

Everybody loves that new car smell, but the pandemic and its ensuing financial crisis put that purchase out of reach for many. Choked supply chains caused delays and inflated prices, car insurance costs have surged about 57% since April 2020, and the average rate for a 48-month new loan hit 8.3% last September. Plus, while electric vehicles are finally finding their footing, adoption rates have been lower than expected, and most automakers have delayed plans for switching to all-electric lineups.

So it makes sense for drivers to hold onto their vehicles for a little longer or buy a cheaper used car, which has shifted the distribution of vehicles on the road by age. In 2019, cars younger than six years old accounted for 98 million vehicles in operation or about 35% of the total, S&P Global Mobility found. But now they represent less than 90 million:   

• New car sales may have turned a corner, however, bouncing back up to 15.5 million new cars sold last year, after falling to less than 14 million in 2022. Cox Automotive forecasts 2024 will be the best year for new car sales since 2019 as interest rates are expected to come down in the second half of the year.
• While automakers and dealers could rebound this year, auto parts shops and services centers have made out pretty well. Sales at O’Reilly rose to $15.8 billion last year, up from $11.6 billion in 2020. Similarly, AutoZone reported $17.5 billion in sales compared to $12.6 billion in 2020. Both companies have made their investors happy, too, with their share prices increasing 170% and 165%, respectively, in the last five years.

SUVs, Trucks, and Crossovers: Model preference is also changing. Since 2020, more than 27 million passenger cars have left the US vehicle population, while just over 13 million new ones were registered, according to S&P. At the same time, more than 26 million light trucks (including utilities) were scrapped, and nearly 45 million were registered. Nobody wants a sedan anymore, it seems. In fact, by the end of this year, Cadillac will be the only member of the Big Three — Ford, General Motors, and Chrysler — to offer a conventional four-door sedan, Slash Gear reported. All those commercials must be true: Americans really do want cars that can drive through rivers and up mountains.

The buy now, pay later industry is paying now for its lack of transparency. 

On Wednesday, the US Consumer Financial Protection Bureau (CFPB) announced new rules that finally put up some guardrails around buy now, pay later (BNPL) players. Their solution? To treat providers a lot like — you guessed it — credit cards.

Buy Now, Cry Later

BNPL has long allowed customers to place purchases into a four-month payment plan. And usage — particularly among zoomers and other young shoppers — has exploded, likely due in part to the current inflationary era. According to Adobe Analytics, US online shoppers used BNPL for nearly $20 billion worth of purchases in the first quarter of the year alone, up 12% from a year ago. Meanwhile, the global BNPL market could grow as high as $700 billion by 2028, according to Juniper Research. One in five US households uses BNPL platforms, according to Federal Reserve Bank of New York estimates, with many users often having limited access to credit.

But all that quasi-credit spending has created what Wells Fargo senior economist Tim Quinlan calls “phantom debt,” an especially troubling trend because major BNPL players like Klarna and Affirm don’t report these mini-loans to major credit agencies. Worse, a recent survey of BNPL shoppers conducted for Bloomberg News found that 43% of users are behind on payments, with 28% saying BNPL payments have forced them to be delinquent on other debts. 

The CFPB’s new rules may not curb conspicuous consumption, but they will provide some standards of transparency and protection:

• Under the new rules, BNPL firms offering “buy in four” services will be required to provide regular billing statements, prompt refunds on returned purchases, and investigate consumer disputes — like many of the rules governing credit card companies under the Truth in Lending Act.
• The CFPB’s new rules, however, don’t require platforms to report how they interact with credit bureaus, keeping much of the industry’s transactions in a black box.

Wells Fargo’s Quinlan told Bloomberg that the industry’s discreet nature may see economic experts “lulled into complacency about where consumers are,” adding that “people need to be more awake to the risk of BNPL.”

Orange You Mad: Unsurprisingly, the BNPL industry isn’t thrilled. “Trying to regulate BNPL like a credit card is like comparing apples with oranges,” Klarna wrote in a blog post Wednesday that asked for more industry-specific rules moving forward. We’ll call the press release “cry now, detail bespoke regulatory framework later.”

Ever wonder what big old Amazon thinks of all the headway other retailers are making online? Now we know. 

After roughly two years off, Amazon is aggressively expanding its warehouse and logistics network, The Wall Street Journal reported on Wednesday. Walmart’s e-commerce ambitions and the ascendancy of discount online sellers Shein and Temu may just be to thank.

Same-Day Some-Days

Amazon massively expanded its logistics and warehouse operations during the pandemic, when e-commerce sales as a share of total US purchases rocketed to nearly 17% from around 10%, per Census Bureau data. In a 24-month span, the e-commerce giant doubled the size of its fulfillment network — growth that occurred so quickly that Amazon spent the subsequent two years tapping the brakes on network expansion entirely. 

But in that time, Walmart reshaped its e-commerce game, using its 4,700 US locations as de facto e-commerce fulfillment centers. Coupled with China-based Shein and Temu busting into the US market with ultra-cheap goods, Amazon is facing pressures on both price and delivery. Which explains why it’s re-upping its logistics network game:

• Amazon has either leased, bought, or announced the addition of 16 million square feet of warehouse space this year, according to MWPVL International, a Canada-based supply-chain consulting firm. It already owned 413 million square feet of industrial space in North America, per company filings.
• And it’s not just expansion — in the past year, Amazon has rejiggered its logistics network to emphasize regionality over centralization, which it says expands its capacity for rapid delivery. Some of the new spaces added this year are small facilities intended specifically for the final stages of quick delivery, the WSJ reports.

Work It: Expanding its logistics footprint likely means expanding its logistics labor force, too. But that may be easier said than done. In its first-quarter earnings report in 2022, Amazon admitted it may have over-hired in its warehouses to match the rising demand. Meanwhile, a leaked memo obtained by Vox that summer revealed internal company research that contended that Amazon may “deplete the available labor supply in the US network by 2024”; a separate investigation by The New York Times found that the annual employee turnover rate at Amazon’s warehouses had reached an astonishing 150%. No wonder the company is turning toward humanoid robots.