Back many more years than I would care to admit, I sat through my share of press conferences where auto execs would brag about lowering the average age of their buyers from somewhere in the 50s down into the 40s.
Auto execs may soon be bragging about raising the age of their average buyers.
The age factor back then was particularly acute among the domestic brands, which saw the average of their buyers climb while imports were peeling away their younger buyers. Much of this was also due to the fact that the product pitched by the domestics, thanks to their floaty rides and less-than-compact packages, did seem geared more towards those eligible for AARP membership than not.
Things change. The products on the market today have a more universal sensitivity to them. There are Ford and Chevy models that appeal to Honda and Toyota buyers and vice versa. The Detroit automakers are not necessarily typecast as builders of your father's Oldsmobile anymore.
So it's interesting that a new study by the University of Michigan suggests that the worm has turned and auto execs may soon be bragging about raising the age of their average buyers. The Transportation Research Institute at U of M has found the peak probability of buying a brand new automobile is now in the 55-to-64 age group. This is a significant shift away from a study four years ago that found the 35-to-44 set most likely to buy new cars. We reported these findings earlier in the week, but they deserve a closer look.
Of course, a lot of this can be attributed to aging baby boomers, the proverbial rat working its way through the snake.
Two years ago, the leading demographic for purchasing a new car were 45-54 year old buyers, who accounted for 26 percent of the market, compared to the next bracket up, 55-64, who were responsible for 23 percent of sales. Study author Michael Sivak also found that this oldest demographic had the highest new car per driver ratio – one vehicle bought for every 14.6 drivers – than any other segment.
"The 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. "The emphasis on this relatively older age group is further supported by the expected continuation of the graying of the population and the consequent continuation of the increase in the number of older licensed drivers."
This oldest demographic had one vehicle bought for every 14.6 drivers.
This trend has many factors driving it – better health and longer lifespans of aging Americans and the fact that many in that age group are at their peak earning years or recently retired. The other demographic groups, especially the younger ones, are not as well insulated from an uncertain economy and find that the rising costs of new cars make buying a new one more difficult. And in the youngest demographics, we have seen teens putting off getting their drivers' licenses later and later. Add to that student loan debt and difficulty getting that first job, and you'll find that most under 30 consider the idea of buying a new car pretty far-fetched.
But, even as the new car buying population grays, don't expect to see execs running out touting about their conquests of the geriatric set any time soon. A long, long time ago, the industry wisdom held that you can't sell an old man's car to a young man, but you can certainly sell a young man's car to an old one.
Most under 30 consider the idea of buying a new car pretty far-fetched.
Cars are and will continue to be a fountain of youth, no matter the demographic. So the more the market may change with older buyers driving new car sales, the more things on the advertising and product front will look the same.