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Wednesday, January 18, 2012

There are older cars in the American driveway

Observation:   A recent story from USA Today indicates that the average age of vehicles owned by consumers in the U.S. is 10.8 years.  However, that number is based on data ending July 1, 2011, and does not reflect a very strong finish to the 2011 sales year for car dealers.  Click here to see the full story.

Implications:   As the economic recovery gains momentum (or, as the slow pace of the recovery at least demonstrates that it has the stamina to continue), consumers are likely to act on the pent-up demand that has been caused by deferring big-ticket purchases.

Throughout the recession, many consumers tried to “stretch their buying cycle.”  In effect, someone who was used to trading vehicles every three years would try hold onto their car for four; someone who was accustomed to buying a new vehicle every four or five years may have waited for five or six.

As consumers come back to the dealership, are you ready to serve them… really?  Have you considered how your consumer’s purchase priorities might have changed since the last time they went car shopping?  How do their new realities—with regard to gas prices and shifting household incomes—impact the criteria by which they will decide?  To what degree are you seeing the influence of Internet shopping—both tethered and mobile—as the consumer does research in advance (or in the middle) of their car shopping adventure?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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