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Study Says Older People Buy More New Cars

Study Says Older People Buy More New Cars

By Jeff Youngs, June 03, 2013
A new study by the University of Michigan Transportation Research Institute has found a significant demographic shift in the likelihood of a licensed driver to purchase a new car, pickup truck, SUV, or minivan. In 2007, drivers between the ages of 35 and 44 were the most likely to buy a new vehicle, according to the group's prior research. In 2011, drivers between the ages of 55 and 64 showed the greatest probability that they would buy a new vehicle. In terms of vehicle purchase volume, Americans aged 45-54 buy the most new vehicles.

"There were substantial increases from 2007 to 2011 in the number of drivers 55 to 64 years of age and 65 to 74 years of age," said Michael Sivak, research professor at U-M Transportation Research Institute. "This trend likely reflects the aging of the general population, coupled with the increased probability of older persons having a driver's license."

While it is true that the Baby Boomer generation aged during the period of time studied by the Transportation Research Institute, the United States simultaneously suffered one of the greatest economic downturns in its history. In an interview with Automotive News, Lacey Plache, an economist for Edmunds.com, explained that during the recession, American drivers between the ages of 35 and 44 lost more of their net worth than any other demographic.

Additionally, the University of Michigan data is based on 2011 light-vehicle sales. Since that time, according to Gallup, the unadjusted unemployment has fallen from 8.5% at the end of 2011 to 7.7% at the end of 2012. With more Americans working, car sales rose 13% in 2012, according to the J.D. Power & Associates Power Information Network and LMC Automotive. Furthermore, Automotive News reports that in 2012, the fastest-growing demographic segment among new-vehicle buyers was the 18-34 age group, suggesting that younger buyers are getting jobs and buying new cars.

"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 told Automotive News.

Nevertheless, the Transportation Research Institute's Slivak says: "The findings suggest that marketing efforts that focus on drivers 55 to 64 years old should have the highest probability of success per driver. 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."

Plache agrees that automakers should view the study's findings as a reminder that Baby Boomers remain an appealing advertising demographic, but warns against tailoring advertising campaigns to people of advanced age. "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 told Automotive News.

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