Car Ownership Has Fallen For the Millennial Generation: Here's Why
Some financial experts, political pundits, and (not surprisingly) car companies claim that this trend is due to a shaky economy. "Millennials earn less and have more debt than previous generations, therefore they cannot purchase anything as expensive as a car," goes the oft‐repeated argument.
Nonetheless, most serious economists and social scientists agree that the causes of this phenomenon are a bit more complex. Here are five in‐depth reasons behind this trend:
- 1. Millennials are More Wary of Debt. For many years, excessive home, car, and student loan debt were simply considered to be necessities. Millennials are rethinking that attitude ‐‐ and in order to stay out of debt, they sometimes forgo certain luxuries such a owning cars at a relatively young age.
- 2. Millennials are Greener and Fitter. Millennials are more likely to be conscientious of their carbon footprint than older generations ‐‐ and they are also more likely to prioritize fitness and physical activity. A combination of these trends has led to explosive growth in bicycle commuting.
- 3. Urbanization is all the Rage. Baby boomers and gen‐xers dreamed of one day moving out to the suburbs ‐‐ whereas millennials strive to live in the big city. The desire to reduce commute times and expenses is a driving force behind this trend, so it should come as no surprise that millennial newcomers to the city oftentimes opt for bike trails, subways, and walking commutes rather than for the expressway.
- 4. Tech Impacts Every Aspect of Our Lives. Services such as Uber have made rides‐for‐hire more affordable than ever before ‐‐ while some studies suggest that online forms of socialization have made in‐person get‐togethers slightly less frequent. Both of these factors could contribute to the move away from car ownership.
- 5. Values have Changed. Millennials are more likely to seek experiences over possessions. For example, while a typical gen‐xer might have spent his senior year working to buy a car for college, a typical millennial is more likely to have spent her senior year working to take a gap year backpacking across the US.
Are you considering investing in your first car but unsure about taking on debt? Do you want to learn more about important economic trends among younger generations? Looking for answers to other financial questions?
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