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.
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