Page 7 - ATODAY
P. 7
U.S. NEWS A7
Thursday 10 March 2016
US Financial Front:
Millennials are finally arriving in the car market
DEE-ANN DURBIN millennials headed into car
AP Auto Writer dealerships just like previous
DETROIT (AP) — Millennials generations.
were once a source of “This whole idea that they’re
panic in the auto industry. not going to need cars is
Dubbed the “go nowhere” absolutely ridiculous,” said
generation, they weren’t Steven Szakaly, the chief
getting driver’s licenses, economist for the National
never mind buying cars. Automobile Dealers
Headlines declared it was Association. “The new car
“The End of Car Culture.” buyer age is just happening
New data suggests at least much later.”
some of that worry was It’s a very different story
misplaced. Millennials — from 2010, when millennials
especially the oldest ones — who make up around 30
— are these days buying percent of the population
cars in big numbers. They — bought just 17 percent of
just had a late start. new cars. Auto executives
Now the largest generation wondered aloud if the
in the U.S., millennials trend would be permanent.
bought 4 million cars and In 2011, a University of
trucks in the U.S. last year, Michigan study showed
second only to the baby a steady decline in the Lucy Mueller poses with her 2015 Fiat 500 in Los Angeles. Mueller lived in Los Angeles for eight
years without a car before she finally bought one in July. Mueller took buses and trains, hitched
boomers, according to J.D. number of young people rides with friends and used ride-sharing services like Lyft. Her commutes lasted more than an
hour each way.
Power’s Power Information getting their driver’s
(AP Photo/Damian Dovarganes)
Network, which defines licenses. In 1983, the survey
millennials as those found, 87 percent of
between 21 and 38 in 2015. 19-year-olds had a license. rate reached 13 percent buses and trains, hitched like many recession-weary
— four percentage points rides with friends and used millennials, Mueller wanted
Millennials’ share of the By 2010, that had fallen to higher than the national ride-sharing services like to avoid accruing debt,
average — according to a Lyft. Her commutes lasted so she saved enough for a
new car market jumped to 69 percent. Millennials told report by the White House more than an hour each substantial down payment.
Council of Economic way. Finally, last July, she Szakaly says it will take
28 percent. In the country’s the study’s authors that Advisers. For teens, things bought a slightly used 2015 millennials another four
were even worse. The Fiat 500. to five years to match
biggest car market, they were too busy to get teen unemployment rate “Now that I have a car, it’s the spending power of
rose from 15 percent to almost bewildering to me. I boomers. According to
California, millennials licenses and were happy 26 percent between 2006 feel like a grown-up,” said government data, the
and 2012. Millennials’ Mueller, a project manager median household income
outpaced boomers for the to hitch rides from others. unemployment rate has and video producer for for people ages 25-34 is
improved to around 8 financial software maker $54,243. For those ages 55-
first time. But there was more to percent. Add low interest Intuit. 64, it’s more than $60,000.
rates and low gas prices to Several things kept Mueller In addition, the average
Industry watchers say the story. The advent of the mix and the car market out of the car market. 25-year-old has more than
suddenly looks more She didn’t have a credit $20,000 in student debt,
it’s been hard to get graduated licensing laws — enticing to young buyers. card until a year ago; according to Goldman
Lucy Mueller, 26, lived in without any credit history, Sachs. That’s enough to
a read on millennials which make teens practice Los Angeles for eight years financing a car would buy a new Kia Optima
without a car. She took have been difficult. Also, sedan.
because the generation driving in stages before
is big and diverse, ranging granting a full license —
from recent college was one reason millennials
graduates to settled-down were getting their licenses
suburbanites. Automakers later. An even bigger
were also unsure about reason? The economy.
the impact of new For many millennials, the
transportation choices, like Great Recession hit just
ZipCar and Uber, which as they were getting their
helped millennials delay first job or graduating
car buying. But as they got from college. By 2010,
jobs and started families, millennials’ unemployment
