The trend among younger people, usually the millennial demographic, has been to shun the near century-old tradition of purchasing a vehicle. Since the financial crisis, millennial consumers have taken advantage of ride-sharing apps, public transit and vehicle alternatives, like walking and cycling.
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According to a University of Michigan’s Transportation Research Institute (UMTRI) report, Generation X and Baby Boomers were 15 times more likely to purchase a new car in 2013. There has been a wide variety of reasons for this decline: a difficult car buying process, complicated driver’s license applications and tests, massive student loan debt and the cost of owning and maintaining a vehicle. Today, that number, and line of thinking, is changing, and the auto market is pleased. A J.D. Power & Associates study found that millennials accounted for 27 percent of new car sales.
One of the reasons why millennials have fallen back in love with cars is because the labor market has improved and the economy has gotten better, and thus it has created greater consumer confidence. Although, we may never truly find the reason why millennials turned their backs on vehicles for so many years and whether it was really due to financial considerations, it seems that things are changing.
For those millennials who remain on the side-lines, however, it may be time to reconsider your position. Here are 6 reasons why millennials should start to think about reversing their car abandonment:
1. Buying a Car Has Become Easier
The car buying process has become a lot easier in the past couple of years. Due to slumping auto sales, technology advancement and dealerships wanting to boost sales, the application process can be very easy. Previously, the issue was communication between the salesman and the customer, but this too has changed. Nowadays, salesmen will begin to explain to customers that they will have to bring their Social Insurance Number, driver’s license, insurance, a filled in application and so on. Remember, there’s a lot of paperwork behind purchasing a vehicle, which is the most tedious element of acquiring a car. Moreover, you can now find real-time insurance quotes, car prices and other important information pertaining to your purchase online. You should always perform your due diligence before opening the doors to that dealership.
2. The Future Needs a Car
In the future, it’s quite possible we will be inside self-driving, automated vehicles. We won’t do anything except hit the start and stop button. But that won’t be for another twenty five years or so. However, that doesn’t mean that the existing technology isn’t extensive or fascinating. In the modern generation of cars, you can do pretty much anything inside your vehicle: play Blu-Rays for your children (if applicable), tell your car to play a certain radio station or playlist, connect your smartphone to your stereo system and these are just the most basic features a modern car has to offer. However the most important change in regard to modern cars is that the amount of gas needed has diminished.
3. Getting Quotes is Easier
Let’s face it: insurance rates are possibly the biggest deterrent to millennials purchasing cars. Younger drivers have to deal with paying higher monthly rates because of their age and their inexperience when it comes to driving. However, it’s now easier than ever to get a better deal. Lots of websites and mobile apps help you locate insurance premiums in addition to important insurance information in your state or province and answers to common questions.
Some of the websites and app that you can use:
- Allstate - GoodRide: an app that tracks miles traveled, routes taken, photos and even comments from the motorist.
- TheZebra: a website that lists up-to-date, state-by-state insurance rates, comparisons, data and other pertinent information.
- GEICO App: a mobile insurance app that allows you to change your policy, speak with an "insurance voice assistant" and access to its Accident Guide to record accident details and file a claim.
- State Farm - Driver Feedback: an app that uses a smartphone’s accelerometer and GPS locator to monitor and measure acceleration, braking and cornering, which then leads to a grade for each trip.
- Chase: a website that helps compare auto loan rate by 48, 60 and 72 months.
4. You Need a Car to Go to Work
Due to rising costs of doing business in the city, more and more companies are ditching the big city landscape in favor of outskirts of cities or suburbs. This means employment opportunities will be located outside the city. This also means that if you live in the city then you will need to purchase a vehicle to go to your work (and your job interviews).
If you reside in the city then it’s quite likely that you take public transit, bike or walk to and from home and work. However, this might turn out to be tricky to do when your company leaves the city, you’ll then have no other option than buying a car, unless you’d prefer to spend at least two hours traveling back and forth via train or bus.
5. The Auto Market Desperately Needs You
One of the reasons why United States auto manufacturers needed to be bailed out was because people didn’t buy cars anymore, many drivers had defaulted on their auto loans and the auto industry failed to keep up with the times. Although companies have improved their sales sheets, it hasn’t fully recovered and it still needs you desperately.
We have to be honest here: the car market is a huge facet of the U.S. economy. Without it, who knows what would happen to thousands of workers, the consumption economy and all of this capital and debt? Indeed, if all the pundits argue that consumption is patriotism, then you will have to grab a set of keys.
6. It Saves You Time and Energy
Despite the heavy amounts of traffic that clog our inner city arteries and the immense highways, driving a vehicle saves you more time than taking public transit. Instead of spending an hour going from point A to point B, driving to these destinations will likely slash your commute time by half (at least). Owning a car buys you time, a precious commodity in today’s world where we’re constantly buys.
In addition, owning a vehicle saves you energy. Being a car owner means you can gain extra minutes of important shut eye, you can get home earlier to receive much needed rest and, if you’re planning to spend time with your family on a weekend, you won’t have to leave two hours earlier just to get there.
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The initial sticker shock is something that can’t be avoided. But there are numerous positives to this second- or third-largest purchase decision of your life. Let’s not forget how fun it is to drive.
Over the next 10 years, 40 percent of new cars will be sold to millennials. Although auto manufacturers have been marketing to those 50 and over, millennials are the number one consumers in the economy. Therefore car salespeople will need to change their focus and once they realize that, they will do whatever it takes to put you in a car tomorrow.
Do you own a car? If not, why? Let us know your thoughts in the comment section.