Following our inaugural article on the future of the classic car sector we now look to define the generation that was the focus of the project. The problem that we identified, and the reason for the research project, was an apparent lack of interest from millennials (those we defined as being born between 1980 and 1996) in the classic car sector – something that we became aware of at Classic & Sports Finance some years ago.
In 2016 Admiral research suggested that in the UK the average classic car owner is 52 years of age, whilst in the US Hagerty suggests that by the age of 70 years old interest begins to wane and owners begin to consider selling their vehicles; so, we have our prime classic car ownership window roughly defined as 50 to 70 years of age.
Before millennials come Generation X (born from the early-to-mid 1960s to the early 1980s) and based on the age profile of 50-70 years old Gen X should be fully underway in their ownership experience, which anecdotally could be supported by the fine form that the wider market has experienced in recent years. Ownership under this generation would peak in the year 2030 as all of Gen X will then be in their prime classic car ownership years.
So, in twelve years’ time the older participants of Gen X will theoretically begin to sell their vehicles – but will they want to buy them?
The evidence suggest that millennials do not share the same affinity with cars that those generations the came before them had – in the 1990s almost 50% of Britons aged 17-20 years old held a driving licence, today this figure is 29% whilst at the same time the percentage of people aged between 19 and 34 who do not own a car rose from 28% in 2009 to 40% in 2015.
As well as the costs involved in learning to drive and vehicle ownership millennials are also living in dense urban areas for longer than previous generations which provide higher levels of public transportation, often negating the need for a car. As well as public transport, millennials also have a greater number of options available to them which bridge the gap to ownership with on demand services such as Uber and Zipcar and there appears to be a growing trend in the number of people who are requesting Uber credit as birthday presents – perhaps in lieu of driving lessons.
There is typically an uptick in car ownership as people reach parenthood, and as millennials are entering parenthood later in life than the generations that have come before them it may be that vehicle ownership en masse will also come at a later stage; however, one would suspect that this will be for practical reasons and not for leisure.
The data that was unearthed during the research project would suggest that it is not just classic cars that millennials are seemingly disengaged with, but rather vehicle ownership on a wider scale. If the industry is going to prosper past the year 2030 then it must begin to engage the millennial generation now before it eroded by the tides of behavioural change.
Author: Mark Tofts