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Auto manufacturers today are scratching their heads, trying to figure out why the millennial generation has little-to-no interest in owning a car. What car makers are failing to see is that this generation's interests and priorities have been redefined in the last two decades, pushing cars to the side while must-have personal technology products take up the fast lane.
It's no secret the percentage of new vehicles sold to 18- to 34-year-olds has significantly dropped over the past few years. Many argue this is the result of a weak economy, that the idea of making a large car investment and getting into more debt on top of college loans is too daunting for them. But that's not the "driving" factor, especially considering that owning a smartphone or other mobile device, with its monthly fees of network access, data plan, insurance, and app services, is almost comparable to the monthly payments required when leasing a Honda Civic.
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With recent studies showing a huge decline in auto sales among the millennial marketplace, it's no wonder auto manufacturers are in a mild state of panic, realizing they're missing out on a generation that wields $200 billion in purchasing power. Numbers don't lie, and over the last few years statistics have shown a significant drop in young people who own cars, as well as those with driver's licenses—and that decline continues among the youngest millennials, meaning this is not a trend that's going away anytime soon. From 2007 to 2011, the number of cars purchased by people aged 18 to 34, fell almost 30%, and according to a study from the AAA Foundation for Traffic Safety, only 44% of teens obtain a driver's license within the first year of becoming eligible and just half, 54% are licensed before turning 18. This is a major break with the past, considering how most teens of the two previous generations would race to the DMV for their license or permit on the day of their 16th birthday.
(Score: 4, Insightful) by Anonymous Coward on Wednesday September 14 2016, @01:18AM
I am in my mid 40s. My first car I got when I was 23. It was a graduation gift. It lasted a whole 6 months before it blew a lifter rod through the sidewall of the engine. My second car lasted until someone smashed the backend out. The next one lasted 15 years. My current one I hope to get another 15 from.
I watched many of my fellow 'genxrs' blow shitloads of money into cars they can not afford. Then trash them. I saw many 5000 dollar stereos in 500 dollar cars.
Another thing that people ignore is 'cash for clunkers'. Those were the cars millennials would have been buying and then laddering their way into better cars. Those cars do not exist. Our gov basically ruined an entire fleet of cars. When everyone was going gaga over the program I was telling them GM and Ford just shot themselves in the foot getting that program going. In basic economic terms it means more scarcity driving up the value of the remaining cars.
I remember growing up you bought a shit box for your first few cars. That is what all you could afford. It is was what all of my friends bought. Some would save up a bit and get a not so shitty car but obviously old. Sure the AC was a bit wonky and smelled terrible. Oh and dont roll down the back window it does not come back up. Ignore the hole in the trunk.
Now if you can get used to it. Walking, bike, and the bus are not terrible. The cost ratio is much better. But the freedom of movement is lower. I did it for many years. Where I currently live does not afford that sort of freedom. So I own a car. It was 20-30 mins to any point in town where I grew up. As it was well laid out and had a decent public transportation and paths. Where I currently live it is 2-3 hours to any point in town (which should be less). But there is shit for public transportation and very few paths that go anywhere needed.
Also I currently own one car for my wife and I. Now instead of two shitty cars we have one very nice car that we share.
New cars are a terrible investment. The rare ones worth a pretty penny are never the one you own. Used cars typically come with a random raft of issues that are crazy expensive to fix unless you can do it yourself or 'know a guy'. Sometimes to fix a computer module can be more than the car is worth and you have to tear apart half the dash to get at it.
(Score: 0) by Anonymous Coward on Wednesday September 14 2016, @03:34PM
This poster and the GP have it right, there are several factors at play:
1 - There is a shortage of cheap used cars that don't suck. Cars are more expensive now. I got my first car in 2002 and had many $5K cars to choose from. In 2012, there were virtually none. The cheapest I could get away with was $8K, which significantly outpaced inflation and the market.
2 - Manufacturers have mostly killed the "basic model". My current car (which is cheap) has windows that roll up manually, which is shocking to passengers. "Under $15K" for a _new_ car is considered "cheap" nowadays (http://www.autotrader.com/best-cars/the-7-cheapest-new-cars-in-the-united-states-224878).
3 - Cars are expensive. Do a rough estimate. $100/month for maintenance/repair, $100/month for insurance, $50/month in gas/tolls (13 miles one-way commute), and $8K up front (the equivalent of $30/month) means $280/month to "own a crappy car".