8 Reasons Baby Boomers Buy Pre-Owned Vehicles
We’ve all heard the stories about people in their 40s, 50s, and beyond spending boatloads of money on exotic and fast cars as part of a “midlife” crisis.
Those make interesting tales, but not everyone in that age group (which currently encompasses mostly Baby Boomers to the tune of 46 million people) is so quick to run toward new, snazzy vehicles. In fact, many Boomers are reluctant to pay for this year’s model when they can get a past year’s model that’s perfectly fine instead.
What makes them hesitant to dive into newer cars, trucks, SUVs, and motorcycles? Check out eight of the primary reasons people moving past midlife are saying “no” to new.
1. They’re focused on financing their retirement.
Financial considerations run deep for Baby Boomers facing retirement in the near future. In a survey of 47-65 year-olds, 73 percent of them said they aren’t even going to retire until they feel confident in their savings and investments. And half of them aren’t sure they’ve set enough aside to retire anytime soon — or perhaps ever if they don’t feel they can keep up with their preferred lifestyles.
Given those facts, they’re not keen on taking out auto loans (or paying out of pocket) to finance vehicles that cost a lot. In their minds, it’s better to spend less on a used Honda from a Louisville dealer without bells and whistles than a fully-equipped, fresh from the factory Audi from the dealership across the street.
2. They’re driven by convenience.
Boomers like to have convenience, and that means shopping when they want it, where they want it. Why should a Boomer wait for months for the newest type of car to be unveiled when he or she can simply pick one today from a dealer’s lot? Remember that these are savvy consumers accustomed to having things when they want it.
At the same time, they aren’t pushovers. If they don’t find what they like at one place, they won’t hesitate to look somewhere else. This is a good reason for all dealerships to keep a robust inventory of the pre-owned car, SUV, hybrid, and other models that their Boomer age buyers are likely to purchase.
3. They’re aware of how to stretch their funds.
These aren’t 17-year-old teenagers making inaugural car purchases, but savvy adults who know and appreciate the value of a dollar or two. Because of their history with money, not to mention their deep understanding of 401ks, mortgages, and other fiscal considerations, they tend to have a sense of which cars are better long-term investments than others.
It’s not usual for Boomers to come to a dealership with trade-in value figured out, an approved car loan in hand, and a desire to test-drive a used car that was advertised through a dealer’s website. These aren’t average browsers, nor are they afraid to utilize technology to figure out which wheels make the most sense. But they’re not greedy; they’re ready to buy on fair terms.
4. They may be buying a car for a child.
Yet another reason for Boomers to lean toward buying used vehicles is that they might not be making the purchase for themselves at all. Instead, they could be focused on getting a safe set of wheels for a child or grandchild. Whether this is as a special occasion gift or a “just because” investment, they want to feel good about the choice.
What this Boomer buyer wants is a car that hits high marks for all the safety ratings and reviews. They don’t care about flash, but about substantial safeguards and manufacturer reputation. Color doesn’t matter. Model make and year does.
5. They’re nostalgic.
Sometimes, Boomers are seeking a particular model year of a car for a very sentimental reason: It reminds them of “the good ol’ days.” For example, a Boomer might want to seek out a replica of her first car she bought after completing college or grad school.
This category of Boomer is more patient because she knows she might have to wait a while before her preferred vehicle comes on the market. Dealerships should work hand-in-hand with these types of focused shoppers to explore options and make their dreams of reliving the past a reality.
6. They’re open to testing new car models.
Perhaps a 58-year-old has driven Toyotas all his life. Now, he wants to move to a used Honda or Chevy. But he doesn’t want to pay too much to test out a different car manufacturer’s product.
A great compromise is to invest in a pre-owned vehicle with terrific reviews and ratings. That way, he can get the feel for the way the new model looks and functions. Perhaps in the future, he’ll be more likely to order a newer model from the same car company if he sees fit.
7. They’re traveling a lot.
The Boomer population doesn’t sit around on its laurels. Collectively, people in this generation travel quite a bit, whether in-state or around the country. According to a recently released survey by the AARP, most Boomers take at least four major trips per year.
Given this fact, many of them like to have a used reliable car with decent mileage that they can run practically into the ground. All they have to do is maintain their pre-owned vehicle at the minimum level and they can expect to potentially pass the 200,000-mile mark with ease.
8. They’re merging households.
A lot of Boomers are finding love the second time around, and merging households. In the process, they’re also merging their collective number of vehicles.
For newlyweds with established homes and “fleets,” it can make more sense to trade in a couple of older car models for a relatively newer, but still pre-owned, substitute. That way, the couple has fewer vehicles but still enjoys the advantage of having one that’s more up-to-date than their others were.
Are all the Boomers nationally following this general strategy for car buying? Not necessarily. Still, many of them are making their way into the used car market eagerly. Dealers that take the time to understand this huge population of potential clientele will do better than those who automatically steer them all toward only new vehicles.