Analysis shows that the longer consumers hold onto vehicles, the less likely they remain loyal to a brand

SCHAUMBURG, Ill., Nov. 4, 2014 /PRNewswire/ -- 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

About Experian Automotive
Experian Automotive provides information services and market intelligence that enables results-driven professionals to gain the fullest possible understanding of the market, the vehicles and the people who buy them. Its North American Vehicle Database^SM houses data on nearly 700 million vehicles and, when combined with Experian's credit, consumer and business information, provides an integrated perspective into the automotive marketplace. Experian Automotive's AutoCheck^® vehicle history reports provide dealers and consumers with in-depth information, allowing them to confidently understand, compare and select the right vehicles. For more information on Experian Automotive and its suite of services, visit our Website at http://www.experian.com/automotive.

About Experian
Experian^® is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2014, was US$4.8 billion. Experian employs approximately 16,000 people in 39 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil.

For more information, visit http://www.experianplc.com.

Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.

Contact:

Roslyn Whitehurst
Experian Public Relations
1 714 830 5578
[email protected]
Twitter: @RozWhitehurst

Photo - http://photos.prnewswire.com/prnh/20141104/156378

SOURCE Experian Automotive

Related Links

http://www.experian.com/automotive

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