Hopefully, self-driving cars will be fully functional and on the road when I am not confident with my reflexes and eye sight to drive. Wouldn’t it be great to call the car, tap in the instructions and sit at the back seat to watch a movie? You would feel like you are worth million dollar. Current developments suggest that this is not just a distant dream anymore.
A lot has been happening in the automotive industry lately. One good news is that cars are being sold again and manufacturers start making money. They have been selling a lot more cars from the end of 2013 onwards and they are happy. Recent studies into auto sales figures reveal a few interesting results.
First of all, youngsters are not purchasing as much cars as they used to. Generally, used car market relies on youngsters looking for starter cars. This doesn’t seem to happen as they only account for about 11% of the sales as opposed to 17% only five years ago. Unemployment may be one of the main reasons. Also, they seem to be spending their money on cool gadgets like smart phones, laptops and game consoles. Price of a car is only one part of the costs. Getting them insured, filling up the petrol tank and maintaining them are costly. Moreover, teenage car insurance is expensive.
Who Buys the Hip Cars then?
This raises a question of who is buying those subcompact autos. Mature drivers account for 42% of subcompact auto market. Only five years ago it was only 29%. This revelation may make manufacturers of Souls, Sparks and Scions change their target market from Millennials to Boomers.
You would think that these cars would be great for Millennials (aged 18 – 34). However they are not spending enough according to the latest figures. They used to make up 17% of the subcompact car market five years ago. Currently they only buy 12% of them.
Why Seniors Choose Subcompact Autos?
General expectation was that older drivers would have gone for bigger cars. However, they seem to like these hip cars because they make them cool and young. Furthermore, they like the fact that they can get in and out of these smaller cars with a lot more ease and park them almost wherever they like. It is harder to get on a bigger automobile when you are old that can make them inconvenient.
Another suggestion is that they like these economy cars because of the price tag. When you are retired and not making money anymore you need to learn to live with what you have got in savings. Smaller cars are great in many ways. They don’t cost as much to run or maintain too. So, they are great for budgeting purposes.
Besides, auto technology is so advanced these days in comparison to only few years ago. Small cars are comfortable and equipped with the latest safety features that there are hardly any excuses not to purchase them. They are great for inner city. And you can replace a cheaper car after several years with the latest model. This is quite an attractive proposition for people who like to follow the latest technology. When you invest a small fortune in a car you really need to use it about ten years for it to be worthwhile because they will lose 2/3 of their value in 3 years. The value depreciation is much more scary with the expensive automobiles in comparison with the economy models.
Smaller Cars Are Cheaper to Insure too
Less powerful engines and lower market value may be the main reasons for this. Auto insurance rates for senior drivers can go up after the age of 70. Having a cheaper to insure vehicle counteracts these premium increases. Besides, retirees don’t travel as much that it would be a waste to spend a lot of money on an expensive automobile that will sit at home all day long.
When you are at certain age vehicles become tools that take you from one place to another. It is a way of staying independent rather than relying on alternative transport options. And those distances are getting shorter and shorter as automobiles are kept mainly for local social and essential visits. You are not as keen to take it for a spin or go for a long road trip because you feel like it. So it may be a good idea to keep the costs by buying affordable and easy to maintain cars which will also afford you cheap auto insurance premiums.
So, the news is that older drivers like these hip cars and they are not getting them for their children or grandchildren but themselves. Who would have thought?