NEW YORK (4/10/14)--To generations that idolized the car culture of "American Graffiti" or "Dazed and Confused," it's hard to comprehend why a young person wouldn't want a car.
New interests and priorities have shifted the attitude of the Millennial generation--those age 18 to 34--away from cars. Cars are on the shoulder, while "must-have personal technology products take up the fast lane," said a March 26 Fast Company article.
Fewer new cars are purchased by this market--from 2007 to 2011, the number fell almost 30%. At 80 million strong and with $200 billion in purchasing power, it's a market that automakers and loan providers need to reach. Credit unions make a lot of auto loans--as of February, 31% of their loans fell into the new- or used-car category, according to numbers from the Credit Union National Association.
Economic conditions are part of the issue--weak job market, student loan debt--but Fast Company's survey of college millennial consumers (CMCs) found that the freedom factor of a car has been replaced by technology.
The tech gadget is more highly valued than transportation or owning a car. "Think about it: while CMCs are likely to share a car and a ride, there's no way they would ever share their phone," the article noted.
Without the physical need to get together--why hang out at the mall when you can Skype or chat in-game?--Millennials make connections online for every facet of their lives.
Without a need to get somewhere, older teens are putting off getting their driver's license. According to a 2013 survey by the AAA Foundation for Traffic Safety, 44% of teens obtain their driver's license within 12 months of the legal age for their state, and just over half--54%--have their licenses by the time they turn 18. Without a license, the inclination to become a driver--and car owner--drops.
But by looking at CMCs' preferences for practical, accessible and environmentally friendly modes of transportation, the article noted, both automakers and financial institutions may find models that fit everyone to a T.