Whatever your opinion may be of millennials, there’s no denying they are now America’s largest generation. There are lots of questions surrounding this age group (defined loosely as those born around 1982 up to 2004) and one that we’ve seen recently has to do with cars – why aren’t they buying as many?
First, millennials tend to do things later now than they used to, like getting married, having families, moving out, etc. It’s only logical to assume they would also delay making a larger investment like buying a car. So if you’re in the car business, don’t completely panic. This doesn’t mean they never will – they’re just waiting.
Public Transportation and Location
Millennials don’t necessarily need cars. With all the transportation available today (Uber, anyone?), purchasing a car can easily be placed on the backburner. Many younger people have also been putting off getting their driver’s license, as they can use public transportation or hitch a ride from a family member or friend. As it seems, car ownership is just not as associated with “freedom” as it once was.
Continuing in that vein, the city is where the most jobs are available, so of course, this is where younger, working people are likely to gravitate. And it barely needs to be said that a resident of a larger city is not going to need a car as much as someone who lives outside the city and has to commute to work or school.
As you’re probably aware, technology is hugely important to millennials. With the rise of social media and apps like Snapchat and Facetime, you don’t have to leave your house to escape your family and talk with friends. Again, the need to buy a car in order to achieve freedom just isn’t as necessary anymore.
We also realize that this generation is going to be looking for more from their car. Vehicles which will easily sync with their smartphones and other devices are likely to receive the most favor.
Finally, consider the cost of a car. This new trend of avoiding ownership makes even more sense when you think about the number of college students or recent graduates without jobs/underemployed and overwhelmed by the debt from their student loans.
Whether or not they are willing or able to keep up with a car’s insurance and maintenance depends on their financial stability after racking up those bills at school. With these kinds of limitations, we can begin to understand why millennials are turning to the many alternatives that are available to them today.