We’re not buying it
Millennials are the targets for new-car ads — but the big spenders are the cashed-up Baby Boomers
THE glossy brochures and fastpaced television commercials are full of twenty-somethings mountain-biking and sipping lattes at inner-city cafes.
But the reality is the city SUV craze is driven by Baby Boomers, the over-50s with dodgy hips who find them easier to climb into.
Researchers say the number of young Australian drivers buying a new car is decreasing as they struggle to keep pace with the rising cost of living and mega mortgages.
The average age of a new-car buyer in Australia is 50 but that average goes up for baby SUVs.
Licence data in Australia shows the number of learner permits issued to teenagers over the past decade has kept pace with — or is slightly higher than — population growth.
However, they are buying fewer new cars than ever before.
More people aged 70 and over are buying new cars than those under 25, according to industry sources familiar with consumer buying patterns for the major automotive brands.
This means the most vulnerable road users — aged 17 to 25 — are more likely to be driving older and less safe cars.
“Certainly young buyers are less represented in the new-car market given their population,” says an industry analyst.
“Under-25s represent between just 2 and 3 per cent of the total new car market and yet are approximately 12 per cent of all licence holders.”
About 70 per cent of those younger buyers are women.
“That’s because boys tend to go off and buy used cars they can hot up, or they can only afford a second-hand ute (for) their apprenticeship,” he says.
The analyst says women are over-represented among under-25 new-car buyers because “they’re either more practical with their buying decision and want a car that doesn’t break down — or their parents are more inclined to step in and help them buy a car that doesn’t break down”.
“It’s as if parents are saying, ‘I don’t care if my son drives around in an old clanger, but what if something happens to my daughter’s car? I don’t want her stranded late at night.’
“She is seen as more vulnerable if her car breaks down, is caught in the rain, and can’t get home,” the industry veteran says. “We have ridiculous double standards about this stuff.”
The industry likes to think young people buy new cars, he says, “but they just don’t”.
“The idea that car companies target advertising of new cars at young people is a bit of a joke really,” he says.
“Part of the problem is there are advertising agencies that don’t like making ads for middleaged people. Ads with a youthful look also make older buyers feel young at heart. It’s not cool to advertise to old people, whether it resonates or not.”
Consumer studies show Baby Boomers are driving record sales in the new-car market — and will do so for another 15 to 20 years.
The analyst explains, “It’s just the shape of our population. It’s one of the reasons the average age of new-car buyers is just under 50.”
The proportion of new car buyers over 65 has risen from less than 20 per cent to more than 25 per cent in the past five years. “That’s what’s driving the luxury market: the luxury brands are pulling prices down and baby- boomers are coming into money and into retirement.
“Years ago they might have aspired to a Holden Calais, now they want a European car. They’re also driving SUVs because they are easier to get in and out of.
“The ads will tell you SUVs are about going away camping but for the majority of buyers it’s because those cars are kinder to older people’s hips and knees and they’re easier to load the grocery shopping into.”
Australians are also buying smaller cars than they did a decade ago — hatchbacks and SUVs are now the two biggest segments of the market — because we don’t drive as far as we once did.
“We tend not to drive long distances on holidays as much as we used to, thanks to cheap airfares,” the analyst says. “We fly to where we are going and spend more time at the destination than in the car.”
Overall, the segment with the lowest average buyer age is people-movers. “It’s not because younger people buy them, it’s because older people don’t,” says a researcher.