According to a new study by Autolist there could be troubling trends on the horizon for new car ownership. The study helps illustrate how auto makers are being impacted by younger buyers increasingly wanting to purchase used vehicles.
Are new trends in vehicle ownership a sign of struggles to come for car makers? According to a new study by San Francisco tech start-up Autolist, there are some troubling trends on the horizon in the Auto industry. Autolist recently surveyed 9,315 individuals from September 2016 to May 2017 and found that buyers increasingly prefer used cars over new cars. Overall, only 34% of buyers would purchase a new vehicle while 38% of buyers would purchase a used vehicle.
According to the results the demographic most likely to opt for an older car are younger buyers. 53.7% of people under the age of 40 would purchase a used vehicle. Not only are they more likely to seek out used cars over new cars, they also plan to own their vehicles for a shorter amount of time. 60% of Centennials and 47.4% of Millennials plan on owning their next car for under 5 years. This is a significant difference compared to just the 39.2% of Boomers who plan on owning their next car for under 5 years. So what does this data mean for auto makers?
Cadillac and Audi are lucky, with over 3/4 of buyers wanting to buy new again within 5 years. 77.1% of Cadillac owners and 75% of Audi owners estimate they will purchase another car within five years. Others, like Subaru, can hope owners come back sometime after 5 years. 73.6% of Subaru owners will be keeping their car for more than 5 years.
This could mean that people who are interested in purchasing luxury type vehicles have more disposable income and are less interested in making a vehicle last as a long term investment. How do you think this trend will impact the auto industry?
Autolist surveyed 9,315 individuals from September 2016 to May 2017. Responses were aggregated to ensure representation of all 50 states. The data sample is accurate within a 95% confidence interval with a margin of error of +/- 2%. Centennials were defined as individuals ages 16-24 in 2017, Millennials as individuals 25 – 39, Gen X as individuals 40 – 54, Boomers as individuals 55 – 69, and Traditionalists as individuals 70+. Calculations (averages, differences, etc.) were performed according to traditional statistical methodology.