Millennials have produced plenty of anxiety for automakers. As the stereotype goes, entitled young adults would prefer to hail an Uber, take public transportation or even hitch a ride from Mom instead of driving; an unusually large number of young millennials haven’t even bothered to get a driver’s license.
That’s led to fears that the largest generation in the country — defined as people born between 1980 and 2004 — has abandoned what used to be one of the biggest rites of passage into adulthood: buying a car.
But after much hand-wringing among automakers and industry groups, recent data paint a more nuanced picture of millennials’ automobile purchasing habits. They reveal a large, diverse group with complicated views about cars — ones that are fundamentally different from that of previous generations.
For many millennials, they aren’t ditching car ownership altogether, they’re simply delaying it.
“When you think about it, people are having families later, they’re getting married later, they may be leaving their home later — all of those factors,” said Brian Maas, president of the California New Car Dealers Association. “So it makes logical sense that they might buy their cars later too.”
This year, a study from J.D. Power’s Power Information Network reported that the share of millennials in the new car market jumped to 28%. In California, the country’s No. 1 car market, millennials outpaced baby boomers for the first time.
That’s a big improvement from 2010, when millennials — who make up around 30% of the population — bought just 17% of new cars. That had auto executives wondering aloud if the trend would be permanent and whether it might portend a major downtown for the industry.
The recent spike is not that surprising. After all, it’s only natural to presume that as urban 20-year-olds turn into middle-aged suburbanites, they become more likely to buy cars, just as every generation before them. With housing prices notoriously high in large cities, millennials may have no choice but to move to less-expensive suburbs, which almost certainly would require buying a car to commute.
“The cost of housing and just the need for space will drive people out to places that are less dense,” said Jeremy Acevedo, pricing and industry analyst for Edmunds.com. “And less density means you need a vehicle to get around.”
Some critics are skeptical that millennials will ever catch up. Prolonging car-buying, they say, means fewer cars purchased during one’s lifetime, a problem for the auto industry.
Many also are alarmed by a trend occurring among the youngest millennials: Only about 60% of today’s 18-year-olds have a driver’s license, compared with 80% in the 1980s, according to a study from the University of Michigan.
La Shanti Collins, 14, said she’s in no rush to drive. The freshman at Santa Monica High school said she uses public transportation during the week and has her mom drive her around on the weekends. Cars, she said, scare her.
“I don’t want to get my license anytime soon,” she said.
La Shanti’s mom, Chandra Collins, 47, said she made her 26-year-old son, D’Andre, get his license. Then, because he rarely drove his car, he got rid of it, she said.
There’s also a shift in how millennials perceive cars in general. Gone are the days when owning a car, the ultimate status symbol, meant freedom and maturity. For this generation, automobiles have become less of an aspirational purchase and more of a utilitarian one.
An online survey conducted in September for the personal finance website NerdWallet reported that while 75% of millennials who own a car plan to buy another within the next five years, they just don’t seem to be that into it. Some 43% of them called owning a car a hassle.
That’s the case for Elizabeth Slome, 26, who moved to Santa Monica from New York three months ago. The graphic designer owns a Jetta but is not enthusiastic about using it.
“Driving gives me anxiety,” Slome said. “I also don’t like to look for parking.”
Contrary to the perception that young people are indulgent, many millennials seem to avoid buying flashy cars they really can’t afford and look instead at more practical considerations, perhaps as a concession to the load of college debt many have racked up.
“I see a lot of people my age have affordable, reliable cars,” said Branden Matlock, a 32-year-old real estate agent who lives in San Diego, within walking distance of his office. “I bought my Prius because I wanted to get great gas mileage.”
Instead of a souped-up luxury car, many young car buyers — who grew up with all the conveniences of the Internet and mobile phones — are prioritizing in-vehicle technology.
A Cox Automotive report this year found that millennials are looking for cars from manufacturers that integrate seamlessly with their smartphones and sync with other technology. Among 18- to 24-year-olds, 64% said they expected their vehicle’s technology to be able to do all the things that a smartphone can do; that compared with 56% of Gen X respondents.
The report also found that whereas just 13% of respondents prioritized a vehicle with advanced information and entertainment features over advanced safety features, among millennials, the figure was roughly 33%. In contrast, 91% of respondents ages 51 to 65 prioritized the safety features.
And not surprisingly, millennials were more likely to have a positive opinion of autonomous vehicles and features than other groups.
As millennials reshape the auto industry, they’re forcing car makers to rethink their products. Some are even thinking beyond cars.
Last month’s Los Angeles Auto Show included a huge “mobility” section, which showed off gadgets including scooters, hoverboards and electric bikes geared toward a younger, more futuristic-looking audience.
“While we will continue to make great vehicles, they are no longer our entire game," Ford Chief Executive Mark Fields said at the event. “We are attending the first major automotive show in the world that isn’t just about cars.”
The Associated Press was used in compiling this report.