Automakers may be aiming at the wrong buyers

The graying of America and a growing reluctance among young adults to purchase a car are creating a disconnect.

By Bruce Kennedy Jun 6, 2013 8:21AM

Man buying a new car (© i love images, Cultura, Getty Images)Considering the number of car commercials that feature families with babies, poignant teenagers with new driver's licenses, even hip-hop rodents and the like, you'd think legions of young Americans were jazzed about buying vehicles. Well, according to some new research, while younger adults may be the demographic advertisers target the most, older consumers are actually the ones purchasing those new cars.


According to Michael Sivak, a research professor with the University of Michigan Transportation Research Institute, a number of factors are at play in this trend. The economic downturn has reduced vehicle sales overall, although they started to rebound in 2011.


However, the number of young people with licenses has also declined. In 1983, 91.8% of 20- to 24-year-olds had a license. In 2011, the figure was just below 80%. At the same time, the number of people ages 60 to 64 with licenses has grown from 83.8% in 1983 to 92.7% in 2011.


Part of that shift is linked to another growing trend: Younger people are abandoning car ownership in part because they can't find stable, well-paying jobs. Many are also fed up with rising fuel prices and the monthly costs of maintaining a vehicle.


Instead, they're taking to public transportation, moving to urban or suburban hubs with food and entertainment within walking distance, or joining the growing number of workers who telecommute.


"These young non-drivers are weaning themselves from cars," Motor Trend noted last year, "and won't necessarily rush to buy them when the job market improves."


Older Americans, with their continued purchasing power, are staying loyal to domestic car brands. According to a study by TrueCar.com, top brands for that demographic are Buick and Cadillac, both made by General Motors (GM), as well as the Lincoln line produced by Ford (F).


"Seniors are looking for a luxurious and comfortable vehicle from a brand they are familiar with and trust," said Jesse Toprak, the company's vice president of trends and analysis. "Many seniors grew up with these iconic American luxury brands in their parents' garage."


Sivak says the auto industry's marketing efforts would find more success if they focused on drivers 55 to 64 years old.


In a press statement he 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."


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99Comments
Jun 6, 2013 10:12AM
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This senior recently bought an economy car with good gas mileage. I don't need a Caddy or Buick to drive the 100 miles a week or less that I now drive. If I had the money to waste, I'd be driving a 400 plus hp V-8, and it sure as hell wouldn't be one of those gunboats.

 

I'm not surprised the young ones are not driving as much. When I was young the last thing I wanted to own was a six banger four door sedan. If it couldn't smoke the tires coming off the line, it wasn't worth owning. If you remember those days, no explanation is necessary. If you don't, no explanation is possible.

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The American Dream is dead -- the young have abandoned ever owning a house, a car and having a good job.

 

Soon our culture will be like that of Mexico

 

 

Jun 6, 2013 11:13AM
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I make good money, yet I'd never buy a new car. It's just crazy, you can get a NICE car with 100k on it and drive it to 200k, then sell it and get another.. All for $10,000 or less.

 

Current car is a 2005 Altima 3.5 with a sweet 5-speed manual, full leather, Borla exhaust, power everything and sunroof. All for $8000 + $1000 4 new tires.

 

I'll let some sucker pay the $35,000 for my next car and pay 1/3 of that for it in 5-6 years.

Jun 6, 2013 12:52PM
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One of my neighbors is an elderly Chinese lady who went to China and came home describing the ant like procession of bicycles going to work in the morning.  Lets see most of the stuff we consume today in America is made in China so now for those too dumb to figure out what that means our lifestyles and income levels will arbitrage out to the Chinese levels. So many Americans figured they were just getting a good deal with free trade and now they have to admit it really wasn't quite so free was it?  So Pedal your butts to work because cars, insurance, parking is soon becoming out of reach for many young working Americans.  That $8 dollar an hour lifestyle is rapidly becoming our new norm.  Make sure you thank your political representative for selling you out.

Jun 6, 2013 11:29AM
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You young bucks that play video games all day eating nachos on Mama's couch need to walk anyway.  Hey, if you are not doing anything, I will pay you five bucks to wash and wax my new car.
Jun 6, 2013 11:44AM
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I am retired and have bought just one new car when I was in my 20's. They are a great investment! Worth 50% of initial cost after four years. Would you buy a stock knowing that would be the outcome?
I typically buy 3-7 year old cars and drive them till a major repair exceeds what I believe I will get the use from it, then I sell or junk the car.
I bought a 10 year old Delta 88 in 1987 with 80,000 miles for $1,400. I drove it to 246,000 and junked it. With maintenance added my monthly ownership less gas was about $35/month for the 10 years. It was a very nice car.

Jun 6, 2013 10:44AM
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Not surprised about young people trying to do without a car.  It's getting really expensive to own and operate a vehicle and there are certain circumstances where it is just not reasonable to pay insurance and maybe a parking spot, just so that you have a car available for use 100% of the time.  Besides, if you need only occasional use, you could always rent or pickup a zip car.
Jun 6, 2013 12:27PM
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Used car prices are still at HISTORIC highs so they're no bargain. As for owning a car? $4+ gasoline is killing younger people's wallets. 
Jun 6, 2013 11:16AM
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This explains why there seems to be so many people driving slowly in the left hand lane with their turn signal blinking.
Jun 6, 2013 1:00PM
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We seniors still appreciate the freedom that cars give us. Younger folks, not so much. The cause is right in our face.....better public transportation, high fuel and maintenance cost and let's not forget the extreme high cost of auto insurance. Just lots of reasons to take the bus. Auto manufactures aren't stupid just a little slow on identifying their market. American auto manufactures have done some really great things on improving their product quality but need to improve their marketing efforts as well. Not just to seniors but overall. Starting with reducing the stupid TV ads that dealers produce. Get real here....dealer ads just don't make the grade.
Jun 6, 2013 11:24AM
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This is like the third time I have seen this article about young folks abandoning cars. Maybe in Big Cities where it's a Pain to Drive and they have a great Public Transportation system but I doubt the same could be stated elsewhere. Older folks usually have far more Saved due to their age so no surprise if they might be the biggest group buying cars. Especially if many held off during the so-called Great Recession.

However, I personally haven't seen any major dropout when it comes to young folks buying cars, new or old. In fact, it seems that I have never seen so many young folks with expensive cars. 7 Series BMWs and Mid-Level Mercedes all over the place. Same for the top Lexus, Infinity, and Acura Models. North America car sales have soared since the downturn. As has the profits of those selling Cars,  American or other wise, Companies are doing well. Europe however is a major Drag........
Jun 6, 2013 2:26PM
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speaking as an elderly person, I'd like to say that a nice Mustang Cobra Jet is just what Grandpa needs to help him enjoy the declining years.  Let the young dipsticks walk if they hate cars.  Get out and walk.
Jun 6, 2013 2:05PM
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This senior just sold a Corvette roadster and bought a new Cadillac Sportwagon. My daughter bought a new Civic, and her 17 year old daughter couldn't live without her 20 year old 4 wheel drive pickup.

Big city people with mass transit may be eschewing automobiles, but in the heartland, we drive everywhere. The parking lots at the local high schools are jammed, and some of those cars are new.

Jun 6, 2013 2:02PM
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I buy a new car every few years rather than buy someone elses problems with a used car.

Buying new cars is a bad investment, but it`s my only vice.

Jun 6, 2013 2:05PM
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I have 3 vehicles all paid for.  1994 F150 bought new.  2006 F150 bought new.  2005 Marque purchased with 20,000 miles.  The value of a vehicle isnt what you paid for it compared to what it is worth today, the value of a vehicle is the use you get out of it.  If I buy a new vehicle I apparently expect it to last 20 yrs or so.  I wonder how much money I lose?

Young people that dont have the need or plan to use the vehicle enough to make it pay are smart to not buy one.    
Jun 6, 2013 2:42PM
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This article isn't correct as it matters where you live and if there is public transportation. I don't live in a place where riding a bus or a train would be possible, so I buy a car. I usually buy new because it will outlast the payments if the car is taken care buy 10 to 15 years.
Jun 6, 2013 2:10PM
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It's largely a matter of demographics.  Younger people are going to larger cities to live because the jobs are there and so is the night life.  But owning a car in the city is more of a liability than an asset.  If you take public transportation to work, you probably drive your car only on weekends, so why make car payments and insurance payments on a vehicle you use less than 30% of the time?  On the other hand, we older folks tend to live in more distant locations where public transportation, if it exists at all, is slow and sometimes scary.  We use our cars to go to the doctor, go to the mall and so forth.  So this is going to be a marketing challenge for the car makers, domestic or otherwise.
Jun 6, 2013 2:43PM
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Nothing wrong with buying a new car.   Pay cash and enjoy it.    $20k plus for a car is silly.

 

Used cars will require brakes, shocks, belts,battery, tires and any other issues the previous own "traded in" sooner or later.

Jun 6, 2013 4:11PM
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You don't need a drivers license sitting in moms basement playing xbox waiting for the boomers to croak off finally.

Jun 6, 2013 12:29PM
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The nice-car-as-status era is over for young people who now just want a way to get somewhere to party or hook-up, or even work, god forbid. It's not about the owned goodies anymore, it's about what you do with your time. The coolest smartphone is much more important than is a fancy car to kids, and I think the less importance we place on owning expensive cars, the better, for them, us, and the earth. Good move.
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