Older South Koreans have emerged as the core consumer group in the automotive market as they buy new cars based on their purchasing power.

According to data from car data portal CarIsYou on Tuesday, consumers in their 50s and 60s accounted for 34.5 percent of the entire new car purchases in the first four months of this year. The figure is higher than 31.3 percent of those in their 30s and 40s.

It is the first time for the senior age group to take up the largest share in new car purchases. In 2021, consumers aged in their 30s and 40s accounted for 32.8 percent while those in their 50s and 60s took up 30.1 percent.

A similar trend is also witnessed in the used car market.

An analysis by CarIsYou showed that the market share in used car purchases of young consumers fell slightly between January and April while that of older consumers increased.

Older Koreans are dominating the automotive market as they have a more stable financial status. Analysts note that young people have become more cautious in buying new and used cars as interest rates on car installments have gone up sharply from last year.

Industry insiders also note that car purchases by senior consumers went up as they bought cars for their children. The younger the driver, the less the driving experience and the higher risk of an accident, which leads to higher insurance premiums.

“Although we don’t have specific data, more seniors in their 50s and 60s are registering themselves as the car owner when purchasing a vehicle for their children to reduce insurance premiums,” said Yang Jae-wan, a senior analyst at the Korea Automotive Technology Institute.

Young Koreans also choose to go with various other platforms, such as car-sharing and rent services. They also have other investments to focus on such as virtual currency and real estate.

“People in their 50s and 60s have retirement income and a higher rate of home ownership despite a fall in earned income, so they can more easily afford a car than young people,” said Lee Yeong-ae, a professor of consumer science at Incheon National University. “It is inevitable that car purchases among young Koreans will slow as their disposable income has declined sharply on higher interest rates.”

By Park So-ra and Choi Jieun

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]