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Boomers Are Buying

New report from J.D. Power and AARP shows baby boomers bought nearly two-thirds of new cars in 2011.

By Claire_Martin May 7, 2012 11:24AM
Ford Fiesta photo by Ford.Even though just 10 percent of the automotive industry's marketing dollars are spent on baby boomers, that demographic is snapping up new cars at an overwhelming rate, according to a new report by AARP and J.D. Power and Associates. In the past 10 years, the average age of new-car buyers has jumped from 46 to 55, and last year, the over-50 set bought almost two-thirds of new cars.
 
"[Boomers] have accumulated wealth and money coming in right now that enables them to buy," Mark Bradbury of AARP told Media Post, adding that boomers have a 21 percent higher median household income than Millennials (the under-30 generation).

The question is, why aren't more automakers targeting older buyers? According to the study, buyers age 18 to 34 comprised 24 percent of the new-car sales market in 2001. That number dwindled to 13 percent in 2011. Yet that demographic gets the most love from advertisers.
 
Chevrolet is an exception, having developed a marketing program with AARP in which the organization's 37 million members are eligible for a $1,000 incentive for the Impala and the Colorado pickup. "I've been [at AARP] for five years," Bradbury said. "And when I first started, it was a struggle to get brands to pay attention." The tide is starting to turn, he says. "Now we have ... many advertisers who want to learn." 

Millennials, in the meantime, are not as interested in cars -- new or old -- as the generations that preceded them. General Motors, which did a study of Millennials' car-buying interests, is hoping it's only a matter of time before younger drivers start making purchases. The study showed that most young people consider buying their first car to be a milestone in adulthood -- but they're delaying all such major life events. 
 
Whether the 80 million members of the Millennial generation (comprising 40 percent of the potential car-buying market) are fickle for the time being or for the long haul remains to be seen. One thing is certain: Many of the vehicles automakers intended to sell to younger drivers are being purchased by the gray-haired set. Boomers bought 52 percent of new Ford Fiestas in 2011. Similarly, 64 percent of Chevy Cruze sales went to boomers, as did 62 percent of Ford Focus sales last year.

9Comments
May 7, 2012 5:15PM
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Can't speak for other Boomers, but I'm at the age where buying a new car, may mean it is my last car.  Buying it before I'm reduced to retirement income allows me to pay for it and not have a concern over that expense when I can't afford it as a retired person.

May 8, 2012 6:11AM
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While I'm just slightly older than the official definition of "Baby Boomer", I've wondered for years where are the nice vehicles targeted for my age group?

 

Or is it assumed by the manufacturers that all people my age are sufficiently wealthy to be able to afford vehicles priced over $40,000?

 

Here's a news flash for them.  Some of us aren't!

May 8, 2012 9:08AM
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Boomers aren't targeted by advertisers, especially the Detroit Big 3, for one major reason: it bit them in the a$$ before. Remember when Caddys, Buicks, and Lincolns are all boxy, soft, and gigantic? These vehicles were all designed to cater to older drivers, people in their 50s and older, whom tend to like big and soft cars. Problem is, these brands became synonymous with "old people" and as a result, are not being bought by the younger generations. As the older buyers die off or can no longer drive anymore, profits for these brands plummeted because the younger generations simply don't buy them. Even today, the American luxury brands still carry the stigma of being "your grandpa's car of choice". All the major automotive manufacturers, including the Detroit Big 3, are looking more toward the future than just the current sales environment. The Big 3, in particular have learned a hard lessons about the need to appeal to the younger generation instead of the old, even though it's the old folks (i.e. baby boomers) who have the most amount of money to buy cars. Because in the end, it's the younger generation who will buy more cars, and therefore bring more profits to automakers, simply because they have a longer life ahead of them, and every company knows that it's important to establish brand loyalty early on to keep making profits from the same customers.
May 8, 2012 9:08AM
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I think the problem automobile companies face when it comes to advertising to more mature buyers is that they have been around enough to see past the bull, know what they want and aren't as easily swayed. Many look for practicality in a car, and practicality isn't necessarily sexy.
May 8, 2012 10:26PM
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Why are the US manufactures ignoring us. My wife and I are both 58 and want a new fuel efficient AWD vehicle. But nobody in the US will make them with Power Seats on both passenger and driver side. We liked the new Ford Escape, but we will not purchase because of the above mentioned design flaw. Right now we have narrowed it down to Audi Q5 or Volvo XC60.

 

After many years of working my wife has problems with her hands. The power passenger seat would make her life much more comfortable.

 

May 7, 2012 4:55PM
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Ford will find that out the hard way when they make the new stang look like an Evo. Lets hope Chevy doesnt make the same mistake.
May 8, 2012 9:15AM
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Quoted Text:
Ford will find that out the hard way when they make the new stang look like an Evo

I'm 28 years old, one of those people considered to be "Millennial", and I quite like the new look for the Mustang. Most people who buy Mustangs these days are people in their 40s and 50s, and the same goes for other muscle cars like the Corvette, Challenger, and Camaro. We Millennials don't have the same nostalgia for retro designs like the boomers do, we like our cars to look slick and futuristic. Ford, Chevy, and Dodge will be smart to re-design these muscle cars to our liking, since we are the ones who will be buying their products when the boomers die off. If they don't, they might as well scrap muscle cars all together, 'cause in 10 years, there won't be enough people buying them to justify the expense of R&D and manufacturing.
May 8, 2012 3:44AM
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adding that boomers have a 21 percent higher median household income than Millennials (the under-30 generation).

It's a big gamble for car companies because after the boomers die off and can't drive anymore then they need to stop focusing on the boomers and start looking ahead or they will lose out on the next two generations.

May 9, 2012 12:12AM
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This Boomer ain't buyin' nothin!!! You expect me to fork out an exorbitant amount of money for the butt ugly cars they're all making today, think again. Like everything else in this society, Detroit has become youth orientated.  Well lets see where that gets them.
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