Why Millennials Aren't Buying Cars
After two good years of robust sales, car ownership continues to decline in the U.S. as millennials and neo-millennials are finding better things to do with their money than car ownership. Adults under the age of 35 don’t feel ownership of an automobile is worth the time, effort, and money. This automobile apathy is a troubling trend for automakers, who don’t seem able to strike a note with what appeals to younger buyers.
One millennial told us, “The breaking point for me was when I sat down and did the math. I didn’t have a car loan, but after paying for gasoline, oil changes, car washes, repairs, tires and rotations, insurance, and registration costs, my total for the year came to $6,000. I decided to move within walking distance of my job and bought an electric skateboard for short trips. I have my groceries delivered, and use mail order for almost everything else I want. If I travel any distance, I take the light rail or Uber. I have never regretted the decision.”
“How does that work on dates?”
He grinned. “I use Uber for those.”
One expert asserts that younger people derive far more pleasure from electronic devices than from driving. The years from 2008 forward proved to be dismal for carmakers, who finally enjoyed two good years--2015 and 2016--before the bottom dropped out again. Now, the market is glutted with new cars, which are typically tied to a six-year loan. Six years is a long time to wait for a driver to buy another vehicle.
The impact of Hurricane Harvey on oil refinery production and gasoline prices hasn’t spurred more car buying, either. The exception is electric and hybrid vehicles, which enjoyed a 38% growth in 2016 from 2015 and is expected to continue even as the market for gasoline-powered cars drops off. While some electric car owners cite lower repair bills and maintenance, new electric car sales could be due to the $4,000-7,500 federal tax credit tied to the purchase of an electric car.
About a third of the used cars which were traded in as part of new vehicle purchases were underwater, representing the highest rate ever. One of the reasons for this is that a new car depreciates drastically in the first few years. The good news is that people who trade cars which are underwater are second-time buyers, meaning that the American love affair with the automobile isn’t quite over.
If you are a millennial or someone else in the Phoenix Metro area and want a no-hassle cash offer on an old, wrecked, unwanted, salvage or burned car, SUV, van or truck, give us a call at I Buy Junk Cars 480-771-8290.