Young Shoppers Buying Again
J.D. Power and Associates finds that young buyers are resurfacing on dealer lots, but they're buying power remains below pre-recession levels.
WESTLAKE VILLAGE, Calif. — Young buyers are returning to the automotive market, according to a recent report from J.D. Power and Associates. The research revealed that young buyers are stepping it up in terms of buying, but their share of actual purchases has yet to return to pre-recession levels.
Shoppers under 20 years old accounted for more than 46,000 of retail sales this year on a year-to-date basis, up 49 percent from 2011. The under-30 crowd accounted for just north of 1.4 million units retailed, a 17 percent jump from last year. While positive, those totals remain below levels seen in 2007.
According to the report, vehicle purchases for the under 20 crowd is down 48 percent vs. 2007, while purchases among consumers between the age of 20 and 29 are down 20 percent from 2007.
“Sales to young buyers have risen sharply (since 2011),” said Thomas King, senior director of Power Information Network, a division of J.D. Power and Associates. “These buyers, who do generally have lower credit scores than the general population, were especially impacted by restricted access to credit, but were also more susceptible to poor economic conditions (unemployment, home values etc.).
“As these factors become less significant, we are seeing sales to this buyer group recover. Hence, the recovery reflects the convergence of several factors, of which improved credit access is one, but not the only driver,” King continued.
King said strong vehicle values also is playing a role in the increase in purchases among the younger demographics, which have served to improve their trade-in equity and reduces their loan amount relative to their new vehicle value. “We are also seeing growth in longer term loans (72 months and over), which help buyers keep their vehicle expenditure affordable by reducing monthly payments,” King added.
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