Baby boomers* have replaced younger Americans as the top buyers of the new automobiles, according to a recent study by the University of Michigan’s Transportation Research Institute reveals. In 2007, drivers ages 35 to 44 had the greatest probability of buying a new car, but that shifted to baby boomers ages 55 to 64, who purchase one vehicle per 19.7 drivers. On a percentage basis, the younger boomers (ages 45 to 54) had the highest percentage of vehicle buyers of any age group in 2011 (26%).
The study suggests that the billions of marketing dollars spent by automobile companies to entice younger drivers should perhaps be focused on their parents, who will likely remain in the workforce longer than expected following the hit their investment portfolios took during the Financial Crisis. There is also an imbalance of older people with a driver’s license versus younger people: In 2011, only 79.7% of people between the ages of 20 and 24 had a driver’s license (91.8% in 1983), while 92.7% of people of the ages 60 to 64 were licensed (83.8% in 1983).
- The economic downturn reduced the number of cars bought in the U.S. from 17.8 million in 2000 to 10.6 million units in 2009.
- According to the University of Michigan Transportation Institute, baby boomers were the most likely age group to purchase a new vehicle in the U.S.
- The financial impact of the recent recession was felt by every age group, as baby boomers continue to work and their children come back to the nest.
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*Baby Boomers were born from to 1946 to 1964.
The opinions expressed are those of our investment professionals, and are no guarantee of the future performance of any American Century Investments® portfolio. This information is not intended to serve as investment advice; it is for educational purposes only.