||Older Buyers a Growing Market for Automakers
Discussion about older drivers usually involves safety and the thorny issue of when they should relinquish the keys to their vehicles. In fact, older drivers have been turning over their keys a lot. But it's often so they can buy new vehicles. Over the past several years, while automakers have been hammered by the recession, buyers age 65 and older have become a steadily increasing share of the auto market.
J.D. Power and Associates tracks new car registrations for 12-month periods ending in April. In the year covering registrations from May 2006 to April 2007, nearly 18 percent of new car buyers were at least 65 years old. That percentage has risen steadily since then, to 19.5 percent in 2008, 21.7 percent in 2009, and 25 percent in 2010. The trend likely has two major causes: society is getting older, and older drivers were more able to afford vehicles during the recession than younger drivers.
In any event, the median age of all new-car buyers rose during the four-year period from 50 to 55. And among drivers 65 and older, the percentage of new-vehicle purchases by drivers age 75 and older also rose -- to nearly 7.6 percent in 2010 from 5.7 percent in 2007.
In tracking specific new-car purchases by age, J.D. Power notes that older buyers exhibit similar preferences to younger consumers. The most popular auto brands among 65-plus purchasers are Toyota, Ford, Chevrolet, Honda, Nissan, and Hyundai. The most popular brands among younger buyers are the same six: Toyota, Honda, Ford, Chevrolet, Nissan, and Hyundai. "The top six brands bought by both groups are the same," notes Jon Osborn, a research director for J.D. Power's Automotive Marketing Group. "In fact, the Camry and Civic are the most popular models among nearly all age groups and income brackets."
However, the picture changed when Power looked at the ratios of 65-plus buyers to younger buyers for each type of vehicle. For example, Osborn explained, 2.66 percent of all vehicles bought last year by buyers age 65 and older were Buicks. Among drivers younger than 65, only 0.61 percent bought Buicks. Comparing the two figures, Power calculated that older buyers were 4.36 times more likely to buy a Buick than younger buyers, so it awarded Buicks an index score of 436.
Using this approach, the company found that older buyers tilted strongly toward cars made in the United States. Following Buick as the most popular brand were Lincoln (317), Cadillac (258), Mercury (221), and Chrysler (206). Ford has since dropped Mercury from its product lineup.
Power was also able to identify the top individual vehicle models for older buyers. Here is the list of the top 10 available new car models, including each model's statistical preference among older buyers. (Two discontinued Mercury models have been joined by the models that ranked 11 and 12).
-- Mercury Grand Marquis (2700)
-- Cadillac DTS (1133)
-- Buick Lucerne (1063)
-- Buick La Crosse (647)
-- Hyundai Azera (550)
-- Cadillac STS (500)
-- Mercury Sable (500)
-- Lincoln MKZ (450)
-- Toyota Avalon (447)
-- Acura RL (400)
-- Chevrolet Impala (379)
-- Lincoln MKS (360)
(Source: U.S. News & World Report, 02/18/11)
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