Car culture is alive after age 50
Auto industry analysts currently worry about a decline in driving among Millennials. The Washington Post recently cited research documenting “the many reasons millennials are shunning cars.” And The New York Times has pondered whether this means the the end of car culture.
Well, as the U.S. auto show season opens next week in Los Angeles – and with the granddaddy of them all in Detroit coming in January – it’s worth noting that car culture is alive and well among Americans over 50.
Surveys by the University of Michigan Transportation Research Institute (UMITRI) and J.D. Power consistently show consumers aged 50+ buy at least half of U.S. new cars. For calendar year 2013, Power estimated that just 47% of sales went to Millennials and Gen X combined, leaving 53% for aged 50-plus.
However, despite enormous buying power, Americans over 50 are almost invisible in auto advertising because Madison Avenue says we are too old to adapt or switch brands. Cool young dudes with trendy 3-day beards – and skinny wallets – abound in car ads, but the grown-ups are ignored.
Reality check: let’s take a look at 2013 light duty passenger vehicle sales …
- U.S. consumers bought/leased 13.1 million, and an additional 2.4 million units went into fleets for a national total of 15.5 million (National Automobile Dealer Association and Automotive Fleet Magazine.)
- Projecting the J. D. Power data, 6.9 million new vehicles (53%) were bought by Americans aged 50 or older. Of these, 5.2 million (75%) were bought by Boomers, with the remainder going to the Silent and WW2 generations.
Automakers don’t shy away from fighting for customers in these two vital markets; media intelligence firm Magna Global reports that automotive advertising ranked #3 in Germany and #5 in the UK among all ad spending categories in 2012.
Ground control to Major Tom: global auto advertisers spend huge sums to aggressively compete for market share in Germany and the UK, but diss American Boomers who buy the same number of vehicles. How weird is that?
It’s high time to scrap tail fin era thinking and unleash some creativity.
Boomer adaptability: learning to pay more while saving money
Back in 1970 the average new car cost $3,542 (US Department of Energy) and gasoline was 35 cents a gallon (U.S. Energy Information Agency [EIA].)
By 2013, these prices were $31,252 (TrueCar.com) and $3.52 (EIA.) Even after adjusting for inflation (U.S. Bureau of Labor Statistics CPI calculator) these are hefty increases.
- A $3,542 car in 1970 would cost $21,266 in 2013 dollars; so at $31,252, we paid 47% more in real dollars.
- 35 cent gas in 1970 would cost $2.10 in 2013 dollars; so at $3.52, we paid 67% more in real dollars.
Happily, over the decades, words of wisdom from Alfred E. Neuman, MAD Magazine’s patron saint of Boomer optimists, have trained us well. Paying more for cars and gas – why worry?
For starters, R. L. Polk & Co., America’s registrations score keeper, reports that by 2012 new car buyers were keeping them for 6 years. In 1970 we traded every 3 to 4 years, so buying two new cars every 12 years versus three erases the 1970-2013 price jump.
And Boomers save big because today’s vehicles are more fuel efficient and reliable than in the 1970s.
- 2013 cars averaged 27 MPG (TrueCar.com) vs. 13 in 1970 (EPA.) Now that we keep our new car for six years, we’ll save thousands of dollars on fuel over its life.
- 1970 car repair bills piled up after about 3 years. Today’s models run up to 100,000 miles with few problems; we save thousands of dollars on maintenance.
The 21st century – the new good old days for Boomer car buyers
In addition to saving Boomers money, modern cars pile on the value with an array of former options, luxuries and extras as standard equipment.
Today, typical standard equipment includes power windows, locks and mirrors, automatic transmission, air-conditioning, airbags, anti-lock brakes, a terrific sound system and a host of electronic marvels. Many of these features were only available on ’70s luxury cars; some were unavailable at any price.
So for value-packed safety, comfort and convenience, the 21st century is the real good old days for Boomer car buyers.
Boomers: an enormous neglected pool of new car buyers
As discussed in an earlier post, the conventional Boomer definition, born 1946 to 1964, fails to include the generation’s true socio-cultural dimensions. In reality, the Boomer-Plus Generation™ began in 1940, and its members grew up in the same dynamic, optimistic world as their slightly younger siblings.
At 89 million strong, and owners two-thirds of America’s household net worth, as a country this would be the third largest economy on the planet – a larger, more affluent market than Japan, Germany, France or the UK.
Thanks to the swelling ranks of American over 50, this huge audience will thrive in the coming decades. And at over 6 million annually, we’ll buy at least 120 million new vehicles in the next 20 years. It is naive and costly for auto advertisers to continue neglecting us.
For now, the highway to the 50+ demographic is the road less traveled. But not for long. When just one disruptive car brand decides to capitalize on our vast buying power, traffic jams will be sure to follow.