A 61-year-old who retired last year recently purchased a mid-to-large sedan worth 60 million won. “The cost seemed daunting on a working salary, but with my retirement pay, I thought it was the perfect time to fulfill my dreams,” the retiree shared. “I pondered this for over a year since the car wasn’t meant for commuting. I decided to buy it because I often need to take care of my grandchildren and I want to travel more in the future.”
According to the Korea Automobile & Mobility Association (KAMA) on March 31, new car registrations by people in their 50s and 60s accounted for 43.5% of the total last year, reaching a record high. Last year, 454,864 new cars (both domestic and imported) were registered by this age group, marking a 41.6% increase from 321,211 in 2014. The surge in new car registrations significantly outpaced the population growth rate of 26.3% for the same age bracket during this period. The steepest increase in new car registrations was among those in their 60s, doubling from 8% in 2014 to 16.2% last year.
While those in their 20s and 30s hesitate to buy cars due to high interest rates and rising housing prices, purchases have increased among the more economically comfortable age groups of the 50s and 60s. Over the last decade, new car registrations have steadily increased among those in their 50s and 60s but have declined among those in their 20s and 30s. This is partly because the younger group is more affected by high interest rates, due to their lesser ability to finance cars, often resulting in them buying cars on installment plans. Many opt not to buy cars at certain stages in their life cycle, preferring alternatives like car-sharing services. Consumers in their 40s have gradually seen a decline in new car registrations, losing the top spot to those in their 50s since 2019, but they have still remained high, securing second place last year with 24.5%.
The increase in car purchases by those in their 50s and 60s is attributed to changes in lifestyle. In the past, people in this age group tended to avoid buying cars, either because they had retired or were nearing retirement. Recently, many aspire to be “active seniors” after retirement. The desire to actively enjoy leisure activities such as travel and exercise, and to create memories for their later years, has made cars more necessary. Traditionally, sedans have been popular among this age group, but there has been a growing preference for SUVs, which are convenient for outdoor activities. Among new vehicle registrations last year by those over 50, Kia’s Sorento Hybrid and Seltos, both SUVs, ranked second and fifth, respectively.
The high preference for hybrid vehicles is also noteworthy. Last year, Hyundai’s Grandeur Hybrid was the most registered car among those over 50, followed by the Sorento Hybrid. While the Sorento Hybrid previously ranked second in 2022 with 14,200 units, it marks the first time two hybrid vehicles have made it into the top five new car registrations for this age group. This indicates a preference for hybrid vehicles over internal combustion engine cars due to their better fuel efficiency for frequent driving. The fact that Hyundai’s Avante and the Seltos ranked third and fifth, respectively, is analyzed as a result of considering the “cost-effectiveness” in the 20 million won range. It suggests that the conventional trend of the middle-aged demographic focusing on luxury sedans is breaking, with an increase in new car purchases that suit individual lifestyles and levels.
