Millennials take a lot of heat from older generations, being blamed for different work dynamics, lower marriage rates, and even the undoing of the napkin industry. Many people even predict that millennials are going to be the downfall of vehicles, due to their favor of public transportation and rideshare services. But a new study has found that while millennials are buying fewer cars, it’s not because they don’t like cars, but that their circumstances are different than older generations.
A study conducted by QuoteWizard.com looked at millennial car-buying habits and found that they are, in fact, still buying cars. But this generation tends to buy less expensive and more practical cars. The study shows that the average MSRP of the five top-selling cars in 2018 was more than $5,000 higher than the average cost for the top five cars bought by millennials.
The most popular cars bought by millennials included the Honda Accord, the Nissan Altima, the Honda Civic, and the Toyota Camry — all practical vehicles.
And it’s not just because millennials are facing crushing debt — although that is expected to be a contributing factor, seeing as how millennials have an average of $36,000 in debt. But millennials also have more access to public transportation options than previous generations. This is especially true seeing as how more millennials are living in large metro areas and cities, where public transportation is abundant. And with access to public transportation, millennials don’t feel the need to buy a car, let alone an expensive one. The average American spends about 87 minutes every day in their car, but millennials are opting for alternative transportation options.
Furthermore, the study pointed out that this generation is less likely to get married and have children, especially at a young age. So without kids or partners, millennials are gravitating towards less expensive, smaller vehicles.
In the past, it was a big life goal to own an expensive, “cool” car. And it was easier to do so, with lower costs and a more stable economy.
According to Adam Johnson, a Quote Wizard insurance expert, I think the trend or hype of owning cool cars is less of a thing than it was for earlier generations. Many young people today have other priorities, like traveling or paying off debt. And studies show that Millennials prefer to spend their money on experiences over items.”
Johnson went on to explain that in a time where owning a home is more expensive than ever, eliminating vehicles is an easy way to cut expenses. And seeing as how more millennials are working remotely or using public transportation to get to and from work, cars aren’t all that necessary. So while only around 8.7% of households in the U.S. didn’t have a vehicle in 2016, this number is expected to continue to rise — but not as drastically as people think.
As millennials start families, pay off their debt, and enter a part of their life where they’re earning more money, they’re expected to buy more vehicles. And with a PwC forecast predicting there will be about 107 million vehicles manufactured globally in 2020, it’s proven that vehicles are still being manufactured at vast amounts.
So, are millennials refusing to buy cars because they hate them and want to see the automotive industry fail? No, they’re not. Are millennials still buying cars? Yes, just fewer and more practical options, as they face challenges in life that prevent them from being able to afford expensive models.