Last year, Dave Rodham bought two Ford Mustangs – a red one because it looked cool and a white one with a big V-8 engine because it sounded cool. For Rodham, 63, those were his 50th and 51st cars.
“I have to have a new car every year and a half to two years,” says Rodham, of Virginia Beach, Va., who says he pays cash for his cars. “After I retired 10 years ago, I didn’t have anything else to do, so I went out and bought new cars.”
For generations, car buying declined as consumers entered their golden years. Now, boomers are refusing to follow their parents’ lead and go quietly into the car buying night.
The 55-to-64-year-old age group, the oldest of the boomers, has become the cohort most likely to buy a new car, according to a new study by the University of Michigan’s Transportation Research Institute. Graying boomers replaced the 35-to-44-year-old age group, who were most likely to buy four years ago.
The findings show there are plenty of miles left in boomers’ automotive passions and pocketbooks. They also suggest the billions the auto industry spends to try to woo the elusive Generation Y, the children of the boomers, would generate a higher return on investment if targeted at older drivers.
“You shouldn’t be chasing the younger people, you should be looking at the older people,” says Michael Sivak, author of the study.
And the recession is extending the working years and peak earnings period of the 76 million Americans who were born from 1946 through 1964.
“People’s nest eggs were decreased, including their retirement portfolios, by the recession,” says Lacey Plache, chief economist for auto researcher Edmunds.com “We can expect these people to be in the work force longer and, as a result, buying cars longer.”
There’s also a strong psychological reason: Their cars define them.
“The car was a phenomenon of the 20th century,” says John Wolkonowicz, a Boston-based automotive historian and ex-Ford planner. “For people who grew up and lived in the 20th century, the car was freedom, it was status, it was an extension of you, a visible expression of you and your personality. A 20-year-old doesn’t see the car the same way.”
That helps explain why consumers ages 55 to 64 had the highest rate of vehicle purchases in 2011, while the youngest age groups had the lowest rate. Even consumers 75 and above bought cars at a higher rate than 25-to-34-year-olds and 18- to-24-year-olds, the Michigan study found.
Automakers have spent billions to produce youth vehicles, which end up selling better to boomers. A decade ago, Honda fielded the boxy Element sport-utility vehicle with clamshell doors and rubber floors that could be hosed out by on-the-go young people. Instead, boomers bought the car until it was discontinued in 2011.
“One of the dirty little secrets of the auto industry is all these cars are positioned in advertising and public relations as something a 25-year-old will buy,” says John Morel, a market researcher for Honda. “But your propensity to buy a car at 25 is roughly a quarter of what it is at age 65. By definition, very few cars sell in high volume to 20-somethings.”
Toyota’s Scion line aimed at Gen Y also has sputtered. Scion sales fell 9.3 percent in July after a 25 percent plunge in June and are down 1.8 percent for the year at 41,261, according to researcher Autodata.
But it still has a devoted follower in Michael Leek, 60, a city planner in Shakopee, Minn. He drives a “Cherry Coke” red Scion tC that he upgraded with gray pinstripes, a lowered suspension and a growling, chrome-tipped exhaust.
“City planners ought not to like cars as much as I do and guys who are 60 should be getting over it, but I haven’t,” Leek says. “I look in the mirror every day and I’m pretty sure I don’t look like I’m 30 or 20. That’s not a problem. It’s really whether I enjoy driving the car and like how it looks when I walk up to it and when I walk away from it. And I do.”
Now Toyota is embracing its boomer buyers with a model targeted at them, the Venza sport wagon that’s easier for aging drivers to climb into than a high-riding sport-utility vehicle.
Toyota introduced the Venza with TV commercials that “made fun of the millennials” for believing they remained the “center of the universe” after they left the nest, says Bob Zeinstra, the automaker’s national ad and strategic planning manager.
Venza sales rose 11 percent last year to 43,095 models. Deliveries this year through July totaled 23,498, the same as the year-earlier period.
General Motors, Ford and Chrysler had a troubled history with boomers, who migrated to Japanese and German models over poor quality from Detroit. Now the revived U.S. automakers field some of its best cars in a generation, such as GM’s Chevrolet Impala sedan and Ford’s Fusion family car.
This year, Ford has sold 23 percent of its models to 55- to-64-year-olds, outpacing the total auto industry, which sold 22.2 percent of its vehicles to that group, according to Amy Marentic, Ford marketing manager, who cites data from researcher R.L. Polk & Co.
Automakers are rewriting the playbook on marketing to senior citizens. No longer will retirees buy the big, boulevard cruiser and drive it into the grave.
Rodham, who retired after a military career, is already plotting his next purchase. He’s thinking of trading in the 420-horsepower Mustang GT for a $50,000 Ford F-150 pickup.
“I’m 63 and I can’t handle 420 horsepower,” Rodham says. “You have to be very careful not to get a speeding ticket with that car and I just cleared up all the points on my record.”