||Study Suggests Older Drivers More Likely to Buy New Vehicles
But Marketers Should Not Rule Out the Younger Generation
Automakers and dealers have the best chance of selling new vehicles by marketing to consumers ages 55 to 64, according to a University of Michigan study released last week.
The study looked at the likelihood of a licensed driver buying a new light vehicle based on the consumer's age.
Michael Sivak, a research professor at the university's Transportation Research Institute, compared U.S. data from 2007 and 2011.
Per licensed driver, people ages 55 to 64 in 2011 had the highest probability of buying a new vehicle compared with drivers ages 35 to 44 in 2007.
Lacey Plache, chief economist for Edmunds.com, said older consumers buy more vehicles because many of them are baby boomers, a large generation whose members are about 49 to 67.
Plache said the 35- to 44-year-old age group suffered the largest net worth loss during the recession, which affected their car-buying abilities.
Drivers in 2011 ages 18 to 24 were the least likely to buy a new vehicle -- one vehicle per 221.8 drivers. But Plache said automakers and dealers should not rule out younger drivers, particularly the large generation of millennials -- those consumers mainly in their 20s -- when looking for new-vehicle buyers.
"It's not so much they don't want cars. They have just had a delayed entry into the market because of the recession," Plache said.
Those ages 18 to 34 had a 10 percent growth in share of sales from 2011 to 2012, compared with an 8 percent decrease for those ages 45 to 54 and 4 percent decrease for those ages 55 to 64.
In 2011 overall, one vehicle was bought for every 19.7 drivers, according to the research.
"The present findings suggest that marketing efforts that focus on drivers 55 to 64 years old should have the highest probability of success per driver," Sivak said in a statement.
Plache said automakers are not wasting money by advertising to young drivers --- who are up-and-coming buyers getting to know brands.
Marketing aimed at an older audience might put off younger buyers, whereas advertisements for a younger audience might appeal to the younger and older buyer looking to feel young.
"Older people, they want to be young, so if something is hip and appealing to younger people...older people could end up buying it," Plache said.
Sivak wrote in an e-mail that the findings of the study might interest vehicle suppliers, manufacturers and dealers.
Plache said automakers and dealers should see the study as an opportunity to hit an expanding generation and an older generation that is buying more vehicles.
"You can't just look at 2011 and say this is the end of the story because things are still changing," Plache said.
According to the research, the shift in age of new-vehicle sales can be attributed to the economic downturn that reduced vehicle sales and fewer young people having driver's licenses compared with additional older people with licenses.
From 2007 to 2011, there was a 6.6 percent decline in the number of people between ages 35 to 44 with driver's licenses, and a 16 percent jump in licenses for those ages 65 to 74.
(Source: Automotive News, 05/30/13)