Why Are Young People Buying Fewer Cars

| April 18, 2014 | 0 Comments

young-car

For several generations of people, getting a driver’s license has been one of the most iconic moments in the formative teenage years. It meant freedom, maturity and the ability to cruise around in a set of wheels. Traditionally, driving and purchasing a vehicle were rites of passage that teenagers looked forward to. They hold a smaller margin of value, however, to today’s younger generation. Millennials born between 1983 and 2000 are demonstrating trends that have automakers concerned. Simply put, Millennials are not purchasing vehicles like previous generations. Even more alarming, many Millennials are not even bothering to get their driver’s licenses! This trend is worth exploring; data and interpretations are presented below.

 

The Data

The Millennial generation’s trend away from purchasing vehicles is significant enough to raise the concerns of the automotive industry. Millennials are even forgoing getting their driver’s licenses, which means that many don’t anticipate purchasing a vehicle at all. The Federal Highway Administration reported that, in 1994, over 87 percent of those between 20 and 24 years of age had their driver’s licenses. Among current young people, this statistic takes a significant dip to 82 percent as of 2008. These numbers clearly indicate that the Millennial generation no longer views vehicle ownership and driving as necessary. They may not even think it’s “cool” anymore.

Although the Millennials’ participation in automotive purchases has dipped, it is not a new notion. Since 1983, every age group under 50 has seen a decline in the percentage of individuals with driver’s licenses.

 

Why Aren’t Millennials Buying Cars?

Although the problem is clear, the cause for the decrease in Millennials who own vehicles can be contributed to several factors. Financial concerns like climbing gas prices, a high unemployment rate and oppressive student loan debt may all be factors. The proliferation of the Internet and technology has been identified as a reason for young adults to all but forget about buying cars.

In effect, the Internet, social media, online chatting and apps like Facetime offer the same social stimulation that driving to a friend’s house can. Once they matriculate from college, several young adults have been relocating to metropolitan areas with multiple public transportation options, decreasing the need for a personal vehicle. One of the final suggested reasons for the decrease are restrictions on cell phone use while driving, limits on how many passengers can be in the car and the increased age for driver’s license. Environmental conscientiousness may also play a part in Millenials’ interest in public, eco-friendly transit.

 

Doom and Gloom for the Automotive Industry?

Millennials have seemingly found “computer love” to be more beneficial than the love for a vehicle. This knowledge offers an excellent opportunity to communicate with Millennials through their preferred platform: social media. In addition, the financial concerns of Millennials should prompt the industry to develop more favorable financing options with longer terms and lower payments. While yesterday’s vehicles were optimal for older generations, Millennials want gas-saving and relatively inexpensive vehicles that are loaded with cool technology. Toyota has set an excellent example with their Entune infotainment center, the first interface to combine smartphone, apps and touchscreen technology inside a vehicle.

Although this change among young adults could spell disaster for automakers, it also may be an excellent opportunity for the industry to focus on innovation and for public transit to improve.

Ryan Delridge writes about new trends in the automotive industry. As of late, he has been researching new dealership BDC options offered through DealFinder.

Related posts:

Category: Press

Leave a Reply

?