The Longer You Own a Car, the Less Likely You Will Buy the Same Brand Again

Dodge and Buick vehicles have the longest length of ownership

SCHAUMBURG, IL -- Nov. 4, 2014: Experian Automotive today released findings from an analysis that show the impact that length of ownership has on the likelihood of a consumer returning to purchase their next vehicle in the same brand family. In the first quarter of 2014, the average length of ownership was 93 months, or 7.75 years, and the average brand-loyalty rate was 49.5 percent. The analysis shows that as the number of months that a consumer owns a vehicle increases, they are less likely to return to market to purchase a vehicle of the same make.

For example, consumers who owned their vehicle for 12 months would purchase their next vehicle in the same brand family 57.3 percent of the time, compared to 33.8 percent of consumers who owned a vehicle for 144 months (12 years). Furthermore, the most significant drop in brand loyalty occurred after 36 months, decreasing by nearly 10 percentage points.

"Leases with their fixed length ownership cycle are typically strong contributors to brand loyalty," said Brad Smith, director of automotive market statistics for Experian Automotive. "Over the course of seven years of ownership, a lot of things change, including vehicle product offerings, vehicle budget and credit score. Additionally, the increase in time between dealer interactions, whether they are for sales or service, increases the probability of a customer defecting to the competition."

As part of the analysis, Experian Automotive also looked at which vehicle brands had the longest length of ownership. In the first quarter of 2014, Dodge and Buick led the industry in length of ownership with an average of 113 months. Despite similar ownership lengths, each manufacturer had different loyalty rates at 22.6 percent and 38.4 percent, respectively.

In terms of highest brand loyalty, Ford and Subaru held the top two spots at 61 percent and 59.4 percent, respectively. The average length of ownership for a Ford was 110 months, while the average length of ownership for a Subaru was 85 months.

"Understanding how long consumers hang onto vehicles, or how often they return to market and purchase the same brand, are critical pieces of information for automotive dealers, retailers and manufacturers," continued Smith. "On the one hand, increased ownership lengths create greater opportunity for dealer and aftermarket service organizations. On the other hand it underscores the importance for service centers to focus on customer service and retention. Dealers and manufacturers should continue to emphasize on keeping customers loyal to the service drive and using these customer interactions to highlight their new and soon to be released product offerings, as these efforts will aid in increasing service revenue and repurchase loyalty"

Other findings include:

In Q1 2014, the average length of ownership increased by three months from Q1 2012

Brand loyalty in the first quarter of 2014 improved by 3.9 percent from two years ago

Acura and Volvo led the luxury-vehicle segment with the longest length of ownership in Q1 2014 at 99 months and 92 months, respectively

Lexus and Mercedes-Benz led the luxury-vehicle segment with the highest brand loyalty in Q1 2012 at 55.8 percent and 52.7 percent, respectively