Baby boomers (the generation born between 1946 and 1964) are the dream customers of the automobile industry. Boomers saw both practical and emotional value in owning a car, but the extravagant economic activity during their prime years is part of the reason why millennials purchase fewer cars.
For them, cars were a symbol of self-expression and status. Their strong purchasing power also made them a strong proponent of car ownership.
Looking forward in time at millennials (those born between 1981 and 1996), we can observe a massive shift in mindset toward buying cars. Owing to factors such as soaring fuel prices, the high purchasing cost of vehicles, a rise in quick ride-hailing services, and greater eco-friendly sentiments among millennials, they are shying away from owning a vehicle.
Why is vehicle ownership reducing among millennials?
This generation has valid reasons for not being as car-crazed as baby boomers. Let’s hear them out.
The cost of car ownership is at an all-time high
The State of Consumer Banking & Payments report by the Morning Consult revealed that millennials consider finances to be their biggest roadblock to living the “American Dream”. Two recessions later, this generation is feeling the financial burn.
Add to it, the rising cost of living, a ton of student debt, and the high cost of car ownership have made millennials reconsider their thoughts on buying a car.
The rise of ride-hailing services
To further complement millennial desires, easy-to-access ride-hailing options are available today. The prospect of accessing a ride at the tip of one’s fingers is definitely an enticing one. Millennials are also devoted users of public transport. In light of such viable options, car ownership with its associated costs such as insurance, fuel, maintenance, parking, tolls, etc. is just not worth it.
People used to drive for pleasure, now it’s a chore
Over the years, traffic congestion has only gotten worse. Born into the age of prosperity, boomers felt a sense of pride and novelty in owning cars and qualifying for their driver’s licenses. It was like their ticket to freedom and to a higher status in society. This is not the case for millennials.
Since most of them reside in urban areas, driving a car around is a dreaded hassle, given the heavy traffic and parking problems. It’s no longer fun to own a car.
Cars contribute to the climate crisis
Millennials are concerned about global issues like climate change and air pollution and are less likely to invest in cars that run on our dwindling store of polluting fossil fuels.
As a result of this environmental consciousness, millennials are interested in eco-friendly, clean energy alternatives such as electric vehicles (EVs). Their only concerns revolve around convenience – whether there are enough charging points around their city, and the time it takes to recharge their cars. Fortunately, municipalities around the world are already addressing this issue by rapidly developing EV charging infrastructure and awarding subsidies to independent homeowners that install EV stations.
What will the self-driving car revolution look like?
Now that the millennial generation is turning away from car ownership, the main question that arises is will they hop onto the autonomous car revolution?
In recent times, there has been a growing interest in clean, self-driving cars overtaking traditional automobile models in the future. Those who do decide to own driverless cars in the future could also explore options like joining ride-sharing or hailing networks to earn extra money – much like how millennials leveraged the Ola-Uber boom.
Also Read: Top 10 Self-Driving Vehicle Companies
These factors make it obvious the state of the economy is the primary reason why millennials purchase fewer cars. Rising inflation, the gig economy, ride-hailing, and congested cities have all contributed to millennials saving less, thereby avoiding car ownership.