SCHAUMBURG, Ill. — Experian Automotive found that the longer consumers owns their vehicles, the less likely they are to buy their next vehicle from the same brand. Average length of ownership in the first quarter of 2014 was 7.75 years, a number which correlated with a brand loyalty rate of 49.5%.
In Experian’s analysis, the company found that owning a car for one year held a brand loyalty rate of 57.3%, while owning it for 12 years had a brand loyalty rate of 33.8%. While the drop in brand loyalty was consistent with ownership length, the largest change came after 3 years of ownership. That's when brand loyalty dropped off by 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.”
He also added that the more time a customer had between dealer interactions, whether for service or sales, the higher the probability they would leave the brand.
Experian found that Ford and Subaru had the highest brand loyalty at 61% and 59.4%, respectively, but Ford had a much higher average length of ownership at 110 months. Dodge and Buick shared the longest average ownership length however; both companies had poor loyalty rates at 22.6% and 38.4%.
“Understanding how long consumers hang onto vehicles, or how often then return to market and purchase the same brand, are critical pieces of information for automotive dealers, retailers and manufacturers,” said Smith.
Originally posted on F&I and Showroom