Do old people drive old cars?

Correlation between data sets doesn’t always mean there is a common underlying cause.

Sometimes it’s just a random coincidence, as in this example:

However, I recently came across a correlation that I thought was worthy of closer investigation.

It seems the average age of the Australian Car “fleet” by State correlates closely with the median age of residents by State. That is, the States with the oldest median age populations also have, on average, the oldest cars.

Does this mean older people own older cars?

^{( ABS motor vehicle census 2018 cat 9309)}

On the face of it, there could be a number of underlying reasons for this correlation.

Classic Cars

The relatively recent rise of the classic car movement, boosted by discounted conditional registration schemes for historic cars in most States, has led to an increase in older cars on the road.

Indeed, many classic cars are now being bought (and sold) as investments, as much as for the enjoyment that comes from driving them. Their hefty prices suggest that they are largely bought by baby boomers with higher disposable incomes, so States with larger older populations may follow this trend.

It’s propping up some automotive trades too.

SA alone now has over 15,000 vehicles registered on the scheme, and the flow on effects to panel beaters, spray painters, mechanics and motor trimmers are very evident.

Millennials

We often read that younger people, especially Millennials, are buying fewer new cars than their forebears.

Millennials were people born between 1981 and 1996, so many are still only in their early to mid- 20’s.

People born in this period are less likely to own a car than their age group a decade ago – and in fact, a third haven’t yet purchased a vehicle.

Almost one in five Millennials have the Uber app on their phone – and use it regularly.

200,000 Australians use car-sharing services like Go-Get and Flexi-car, of which nearly half are Millennials, compared with only 20,000 in the Baby Boomer age group.

But remember – the car ownership figures of Millennials are likely skewed by their living arrangements. Younger Millennials still living at home may not have seen the need for a car yet, and others may be living in small apartments in the city, close to work or study, where the need for a car is less.

However, when young people form families and move to the suburbs, usually their need for a car increases.

Young people today are more likely to delay their leaving home and “settling down” than people of similar age were 20 or 30 years ago.

So, it seems many young people are still buying cars, but the tendency is to buy them later than in the past.

Car ownership

It’s also possible that older people simply own more cars – with maybe a classic or two in the shed.

SA, the second oldest median age State, has the highest passenger car ownership per 100 population.

Migrant growth driving sales

The good news for car sales – if Millennials are buying fewer new cars – is sales are being driven by Australia’s population growth through migration, especially from China and India.

Asian-born Millennials and Asian-born Gen Zs in Australia whether born in China, India or elsewhere in Asia are more likely to plan to buy a new car in the next four years than the average Australian in these generations.

Nearly 14% of Millennials born in Asia plan to buy a new car in the next four years, and these figures increase when focusing on Millennials born in China (14.9%) and Millennials born in India (15.3%) compared to the 12.5% of all Millennials.

There is an even more pronounced difference for Gen Z.

Now 13.5% of Gen Z born in Asia plan to buy a new car in the next four years and this rises to 16.3% of Gen Z born in India and over a fifth (20.3%) of Gen Z born in China. This is clearly more than double the rate of Gen Z as a whole of 8.5%.

Source: Roy Morgan Single Source (Australia) June 2016 – May 2018. Base: Australians aged 14+ and currently drive, n=83,064.

Since migrants from China and India make up the majority of Australia’s migration in recent years, maybe Millennials will keep Australia’s “love of cars and driving” alive for a while yet!

The increase in Australia’s overseas-born population from 2011 – 2016 can be seen in the following chart:

Car ownership in cities with good public transport

Population growth in larger cities limits car ownership. Since most larger cities have good public transport, a larger percentage of people take public transport to work. Also, populations living in cities tend to be younger, with many younger workers and students, who often don’t see the need for car ownership – yet.

The City of Sydney has the highest % of commuters taking public transport to work:

With a corresponding lower car ownership per household:

Median Household income

New cars are an expensive purchase, so lower income families tend to buy fewer new cars, and opt for older, used models.

In fact – there is a very close, inverse relationship between age of vehicle and median household income.

So – do older people drive older cars?

Well, of course some do, especially those engaged in their classic car hobby.

But in fact, many older people, especially early retirees, commonly purchase new cars.

Accordingly, the older average “fleet age” in some States is probably more related to household income, and the relatively small populations living in capital cities in SA and Tasmania, than the age of drivers.

As for the eventual impact of Uber, self-driving cars and car sharing on car ownership – only time will tell.

In the meantime, whether you are younger or older – get out on the road and enjoy driving while you can!