Are Millennials Really Not Using Cars?
Recent reports have been released suggesting that millennials are owning less cars than any other living generation did at their age. While these reports may not be entirely accurate or may be making assumptions too early in millennials’ young lives, there are many reasons why this might actually be the case.
Millennials are living in an age of excess technology and not enough money. Both of these factors could contribute to a generation that owns less cars overall than those that came before them.
Is it True?
Around 2009 when the auto industry crashed, people began to speculate that millennials weren’t buying cars and weren’t planning on buying cars. Since then, many reports and articles came out agreeing with the idea that millennials were going to be the end of mass car ownership. However, in 2014, reports started coming out saying that millennials had started to buy more new cars than Generation X was.
Since the youngest millennials are just now reaching the age where they can get their driver’s license, it seems the speculations that millennials weren’t going to be buying cars were a little premature. The drop in auto sales is probably more related to behavioral differences in millennials when compared to previous generations that makes them not less likely to purchase cars, but more likely to look at car buying in a different way.
Not in the Budget
One of the reasons why it might have seemed millennials weren’t buying cars is because they take a little bit longer to make that large purchase than earlier generations did. Millennials are coming out of college with a whole lot of student debt and not a lot of job options. Coming up with enough money to make loan payments or rent payments is hard enough — they can’t afford car payments and gas, too.
Once millennials find their footing and get a solid job, then they can begin looking at purchasing a car. When they do finally decide to buy a car, their budget usually restricts them to used cars, while older generations often bought new cars. Their economic struggles might make them more delayed in car buying, but they aren’t necessarily crossing buying a car off their list completely.
Also, millennials are taking more time after college to travel the world and explore before settling down. They place more value on experiences rather than things, so they would prefer to spend their money on trips and activities rather than a car. While older generations came out of college and immediately got into a regular routine, millennials are more likely to take a year or two before buying a permanent home and getting a steady job, so they have less of a need for a car right away.
Technology Is Changing Transportation
With current technology, it’s easier than ever to get where you need to go without owning a car. Applications such as Uber and Lyft are ride-sharing platforms that act as a taxi service, letting people go where they need to without driving themselves or taking public transportation. Millennials who live in big cities or areas where these applications are popular have less of a need for a car. Again, once they start a family and settle down, they will be more likely to purchase a car of their own, but in the early years of their adult life, they might not see that purchase as a necessity.
The rise of technology has also make it easier and more popular to have a job that doesn’t require you to be in the office. It’s now possible to video-call into meetings, submit reports and presentations from remote locations and conduct business mainly through phone and email. Millennials taking these types of jobs don’t necessarily need a reliable form of transportation, such as a car.
Reports that millennials aren’t buying cars were probably premature and not completely accurate, but it is true that millennials’ attitude toward car buying are different than that of other generations. Millennials will most likely eventually settle down and purchase a car, but this may happen at a different time than car companies are used to seeing.