SAN FRANCISCO — The U.S. recession has not only hit the home, it has hit the garage. A new study by DriverSide.com and Kelton Research shows that more than four out of every five US car owners now plan to keep their current cars longer, due to the bad economic climate. According to the survey of U.S. vehicle owners aged 18 and over, a dramatic 82 percent reported they now intend to keep their cars longer than originally planned. The data confirms the end to the cycle of frequent new car buying, as the U.S. consumer now faces the reality the car they currently drive will be theirs longer.
2008 new car sales, originally predicted to be over 16 million units, plunged to 13.2 million, according to a January report by CSM Worldwide. The analyst firm also predicts 2009 new car sales will come in at only 11.5 million units, a 27-year low. While the new car sales turmoil is widely known, the DriverSide.com/Kelton study is the first to quantify the consumer sentiment towards extending the life of their current vehicles.
"In a downturn economy, consumers focus automobile-related efforts on maintaining vehicles, minimizing operational expenses and preserving the vehicle’s overall value," said Thilo Koslowski, vice president and automotive practice leader at Gartner Inc. "This creates an opportunity for automotive aftermarket companies and service providers targeting consumers’ vehicle ownership needs."
The trend is even stronger for low income drivers and families. Nearly nine of out 10 households with an income of less than $40,000 and families with kids indicate they will keep their vehicle longer than originally planned.
Implications for the Consumer
“The two to three year ownership cycle is dead,” said Trevor Traina, founder and chairman of DriverSide. “While it may be hard for drivers to find the money to spend on an oil change or 100,000 mile service, people should remember that a few hundred dollars in proactive maintenance now will save a few thousand dollars in repairs down the road. The good news is that today’s cars can last a long time if cared for properly, and DriverSide is here to help.”
DriverSide offers free online garages where consumers store information about their vehicles in order to receive tools and intelligence on how to maintain them better. DriverSide is the only consumer website which offers an exact estimate on what repairs should cost, a directory of 230,000 mechanics with ratings and reviews, service schedules and recall information for virtually every make and model, depreciation predictions, advice on parts and accessories and even the opportunity to ask certified mechanics questions about any problem all for free.
Potential Bright Spot for the Auto Industry
Still reeling from the dramatic decline of new vehicle sales in the second half of 2008, the auto industry is confronting the reality that 2009 may be worse. While new car sales are down drastically and used car values have dropped, industry players are learning how to adapt by focusing more on the cars already on the road.
“If people keep their autos longer, there is business to be had,” said Jad Dunning, co-founder and CEO of DriverSide. “The industry needs to shift from thinking about servicing the car buyer to servicing the car owner. DriverSide is working with the entire industry, including dealers and aftermarket players to help them attract and retain car owners to increase profit and to help their consumers.”
One partner, Precision Tune Auto Care has been staying in touch with customers through their partnership with DriverSide.
"Not only have our customers increased their service visits to our stores because of DriverSide, but we have been able to help them lower their cost of ownership and increase the residual value of their vehicle through the partnership with DriverSide," said Kevin Bates, vice president of marketing at Precision Tune Auto Care.
For complete results of the DriverSide.com/Kelton study, see www.driverside.com.