Peter Cooke discusses
the impact 1 in 5 Britons living to the age of 100 will have on the
industry.
Go deeper with GlobalData
The government has predicted that almost one in five
of the current population will live until they are 100. Heaven
forbid that we’re all driving at that age, but the prediction does
indicate a market segment with growth potential.
It’s becoming a truism that
‘people increasingly don’t retire at 65, but start a second or
third career’.
A straw poll among a group of
my friends suggests that none of them intend to retire. ‘I’m too
busy to retire – I’ll just change direction – daytime television is
enough to make anyone keep working’ was the consensus among
them.
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By GlobalDataChanging
demographic
What plans has your
dealership or finance operation in mind for this sector? And what’s
your interpretation of the changing demographic
situation?
A few years back, it was
assumed the bulk of disposable income was tucked away in bank
accounts held by the over 55s who were looking forward to a
relatively hedonistic twenty years or so.
That demographic group is now
beginning to pay more attention to the long-term financial future.
Its members are seeking to ensure they will be able to retain a
decent standard of living for the foreseeable future – and for a
growing number, under present rules at least, that could be
approaching half a century.
When the state pension scheme
and retirement at 65 were first introduced, the expectation was
that retirees would enjoy five or so years of leisure before
kicking the bucket. Even thirty years ago a ‘good innings’ meant
perhaps 10 or 12 years in retirement.
So how might the debate
regarding pensions, longevity and the provision of personal
mobility develop – and what should your business do to embrace any
developing opportunities?
Perhaps the first issue is
not to assume that every snowy-haired customer coming into the
dealership has, or is about to, retire. The second issue might be
to check how, if at all, the customer plans to retire. Simple
questions – complex answers.
A number of people in the
‘not really retiring’ category may have received company cars for
the past 30 or 40 years and may be totally out of touch with the
process of acquiring and managing a private car.
That said, they may have
previously acquired a car for the spouse or the kids. And there
again, maybe the spouse sorted her own car out – or the children
have long since flown the nest.
The switch from a company car
to a self-provided car for a ‘not-quite-retired’ business, might
offer the dealer, through the F&I manager, an interesting new
profit opportunity which may lead to a number of car changes over
time.
There are a wide range of
issues which the ‘not really retiring’ driver may need to consider
and which may best be provided through the dealership.
Finance options
Vehicle type is an obvious
one so we’ll not dwell on that. However, car finance is an
interesting one. Is that person starting his or her own
self-employed business? What are the finance options for a vehicle
for a one-person new business?
Certainly a person with a 20
to 30-year managerial track record solidly backed by assets may
prove a very different proposition to the conventional start-up
finance request.
Would you be able to help? –
do you have an off-the-shelf plan available? While the predicted
business revenue might be relatively small, there may still be tax
advantages that person can claim.
As important, if not more so,
is the insurance situation. There can be all sorts of complications
about the use of a private car on business and the use that is
covered.
Once again, advice may lead
to an ongoing insurance policy sale and, of course, age and driving
history may further lead to a tailoring of the policy.
In the short to medium term,
this might be regarded as a fringe market – a specialist segment,
but with the way that competition is developing in every industry,
the more tightly you can define a potentially profitable niche in
which you can develop expertise and a reputation, the more robust
the business can become.
Food for thought.
