Millennials Still Prefer Cars, Study Suggests

Matt Posky
by Matt Posky
millennials still prefer cars study suggests

Ever since the Great Recession, Millennials have become the target of blame for every economic woe imaginable. They’re not saving their money, they’re not buying homes, they’re not making enough, they change jobs too frequently, they don’t know how to shop around, they’re crippled by debt, and they aren’t buying enough cars. Depending on where you get your news, they are frequently framed as economic imbeciles incapable of doing anything right.

Of course, the obvious counterpoint to those allegations involve the broader problem stagnating wages and a market established by their higher-earning forebears that they can’t seem to wrangle — but who has the time for nuance these days?

While we primarily care about the car buying angle, it’s worth mentioning that Millennials are different from their older counterparts. Still, we were surprised in how that fact manifested itself this week. Apparently, Millennials aren’t all that excited about utility vehicles. Despite SUVs and crossovers dominating the automotive landscape, younger folks are still choosing to buy cars.

That isn’t to suggest that crossover vehicles aren’t a popular choice; they just aren’t the most popular. The Detroit Bureau recently reported on a study from QuoteWizard that tabulated data from its users to find out what people between the ages of 22 and 37 were driving in 2018. Here’s their top 10, in order of popularity, accompanied by each model’s MSRP:

Honda Accord – $23,720

Nissan Altima – $23,900

Honda Civic – $19,450

Toyota Camry – $23,945

Hyundai Sonata – $22,500

Chevrolet Impala – $28,020

Ford F-150 – $28,155

Toyota Corolla – $18,700

Ford Focus – $17,950

Jeep Grand Cherokee – $31,945

The emphasis on Japanese brands is no surprise. Countless studies suggest younger generations are more inclined to purchase Asian or German (if money allows) vehicles than their parents. But there’s a shocking lack of utility vehicles in this list.

The Detroit Bureau claims this is likely down to younger generations moving into cities, calling the results slightly surprising due to “the fact that the average Millennial makes more than $69,000 annually.” That’s not an accurate statement, however. The Pew Research Center’s analysis of new census data, published earlier this year, actually attributed that sum to “Millennial Households.”

From the Pew Research Center:

The growth in household incomes among young adults has been driven in part by Millennial women, who are working more — and being paid more — than young women were in previous years.

Incomes of households headed by 54- to 72-year-olds, Baby Boomers today, are at record levels, while those of current Generation X households (ages 38 to 53) are about the same as the peak earnings of similarly aged households in the past.

The younger you go, the more likely you are to find couples living together that are both employed full time. In truth, that $69,000 per person salary ends up being closer to $34,500 — which might explain why Millennials are buying affordable cars they can probably convince the dealer to discount a bit further. However, we’ve seen previous reports claiming household incomes for people under 35 actually hover around $40,500.

While a lot of these models (Civic, Camry, Corolla, and F-Series) already qualify as some of America’s best-selling models, the general trend seems to be whatever younger buyers think they can get on the cheap while still fulfilling their daily needs. That’s not really so different from the broader car-buying trend but, when you zoom all the way out to look at overall regional sales volume, more expensive crossover vehicles and pickups tend to dominate.

We’re now living in a period where manufacturers are thinning the herd of economy vehicles, shifting their focus to higher-margin crossovers, trucks, and electric vehicles. Meanwhile, Millennials are believed to rake in 20 percent less than their Boomer parents did at the same stage in life. There’s no reason to think they’ll suddenly have a glut of disposal income in 10 years. Automakers will have to have to find a way to make that work.

[Image: Honda]

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  • D4rksabre D4rksabre on Mar 20, 2019

    This article is my girlfriend and I to a tee. I'm 32 and I drive an Impala, she's 29 and drives an Impreza. Our net income is around $63k. I've shopped crossovers and SUVS but the price for what you *actually* get is way out of whack on them. My Impala is much more useful than most crossovers and, despite it's general quality issues, it's a screaming deal in comparison. Everyone I know drives Mazda 3s, Imprezas, Cruzes, and VWs. I can't name anyone in my friend group who owns a crossover or SUV. We're all *trying* to pay off student loans and save for houses/maintain the houses we have. Millennials want the lives their parents had. That's all there is to it. And for a lot of us we're still living the sedan life.

    • Brn Brn on Mar 20, 2019

      As someone in his 50's, good for you. I'm tired of millennial bashing. You don't deserve it.

  • Formula m Formula m on Mar 20, 2019

    35 year old. Drive a Highlander and a Ram. Bought a Honda ATV for my driving enjoyment. No police to harass me, gps to track me or people to crash me when I'm off-road.

  • Probert There's something wrong with that chart. The 9 month numbers for Tesla, in the chart, are closer to Tesla's Q3 numbers. They delivered 343,830 cars in q3 and YoY it is a 40% increase. They sold 363,830 but deliveries were slowed at the end of the quarter - no cars in inventory. For the past 9 months the total sold is 929,910 . So very good performance considering a major shutdown for about a month in China (Covid, factory revamp). Not sure if the chart is also inaccurate for other makers.
  • ToolGuy "...overall length grew only fractionally, from 187.6” in 1994 to 198.7” in 1995."Something very wrong with that sentence. I believe you just overstated the length by 11 inches.
  • ToolGuy There is no level of markup on the Jeep Wrangler which would not be justified or would make it any less desirable [perfectly inelastic demand, i.e., 'I want one']. Source: My 21-year-old daughter.
  • ToolGuy Strong performance from Fiat.
  • Inside Looking Out GM is like America, it does the right thing only after trying everything else.  As General Motors goes, so goes America.