The Real Reason Millennials Aren’t Into Car Ownership

**Update: The content of  this post inspired a keynote presentation for Kain Automotive and was featured in The LA Times. Check out the slides-only version above or watch me present it via 9Slides–see if you can spot which 90s soap star makes a cameo!**

I recently read in The New York Times that 46% of 18-24 year old drivers would choose Internet access over owning a car.

Since this statistic broke in March this year, more have followed. Today, 21-34 year olds only make up 27% of new vehicles sold in the US as opposed to 38% in 1985. Even teenagers aren’t feeling the love, with teen licenses falling by 28% between the years 1998 and 2008.

Everyone from The Atlantic to Time has reported on why exactly millennial car ownership is down. For a quick-and-dirty synopsis of the most popular theories, check out my friend Walter Frick’s bullet point list over at BostInno. While these articles are thorough, well-researched and certainly worth a read, they are missing a very important part of the picture.

As a twentysomething actually living car-free, let me tell you the real reason why millennials aren’t into car ownership….and it’s not the Great Recession.

Quite simply, we are becoming homebodies. Society is undergoing an shift from storefront to homefront. Think about it. Almost all of the needs that twentysomethings used to need to leave the house for can now be met from the couch.It’s bigger than simply shopping online, social media or surfing the web instead of going to the library. We are living through a lifestyle revolution. A new economy. Or, in author and wine entrepreneur Gary Vaynerchuk’s words at Inbound 2012 ( a marketing conference in Boston I attended last week), ” the biggest cultural revolution since the invention of the automobile”.

Half of my generation rates the Internet as more essential than a car. That’s how much lifestyles have changed.

I know this is a pretty radical idea, and a big picture one at that. But when you view some of the reasons proposed for the decrease in millennial car ownership through a lens of “homebody-ism”, it starts to make sense. I’ll use BostInno’s list to demonstrate my point. Just to be clear, every indented bullet point is quoted directly from the list while my comments are underneath.

  • Money – Thanks to the recession, young people don’t have as much of it.

A bad economy, high unemployment rate, and gas prices approaching $4 a gallon–can you really justify taking the car out of the driveway unless you have to? Why not stay home and transfer that cost onto online retailers, like Amazon.com and only go out to buy the things you really need?

  • Urbanization – Young people prefer the cities more than previous generations (see hereherehere). That supports the idea that they’ll have less need for cars.

Young people prefer cities/urban centers because they have less need for cars. More and more of their needs are met at home and they’d like to be closer than driving distance to those that aren’t.

  • Culture – There’s an argument that car culture is falling out of fashion. This seems less plausible for home ownership, as most millennials say they want to own a house eventually (herehere).

Car culture is falling out of fashion because there is less need to leave the house. Home entertainment systems, like video games and fancy televisions, are on the rise while traditional movie theaters just suffered their worst summer turnout since 1993–despite the boost from billion-dollar blockbusters like The Dark Knight Rises and The Avengers. Whereas teens used to go to arcades and movie theaters, more and more are visiting friends’ houses to be entertained at a high quality for smaller cost.

  • Tech – The “sharing” economy, led by Zipcar and Airbnb, is enabled by the internet.

The industry, such as Zipcar, is lowering ages so that, in some cases 18-20 year olds can rent cars instead of the traditional 25 year old limit. Car ownership just isn’t the only option available to twentysomethings when they want to leave the house.

  • Mobility deferred – Young people are in general more mobile than older people, by which I mean they move cities and jobs more often, except today’s youth have been less mobile than previous generations because of the recession. This matters because the less you’re moving jobs and cities, the more sense it makes to purchase a home. But my guess is that many young people, even if they haven’t moved much, still hope to, meaning that purchasing a home isn’t necessarily a wise investment right now.

Here’s where things really click. Millennials do hope to own a home someday. I’d say with the current value shift towards homebody-ism, it’s more important than ever. However, there are fewer options for those who don’t own a car, which contributes to apartment-hopping in various cities. Because owning a home is such an important investment, millennials want to make sure that they are making the right one. And quite frankly, there aren’t many houses that fit with this decreased emphasis on a car-centric lifestyle. So we’re holding out, renting and most likely will make the investment…once the housing system catches up with our needs.

Thanks for reading and I look forward to hearing your thoughts. It’s been a crazy few days of marketing conferences. I’ve just come from Inbound 2012 and am now off to Content Marketing World. I can’t WAIT to share all the new stuff I’ve learned. Until then, I’ll be filling legal pads with notes, passing out my fancy new business cards and getting my networking skills on–thank you again for the shout-out Al Getler!

Lindsey Kirchoff

 

8 thoughts on “The Real Reason Millennials Aren’t Into Car Ownership

  1. Vera says:

    Interesting and well worth further examination. This this mean trading in real life for second life as well?

  2. [...]  The Real Reason Millennials Aren’t Into Car Ownership and David Kain Share this:EmailPrintShare on Tumblr Pin ItLike this:LikeBe the first to like [...]

  3. Lydia says:

    Excellent points – including some I hadn’t thought about. I own a car because it’s a necessity for my area (rural – no public transport) but when I lived in a city I was carless, and when I move back to one I hope to ditch it again. I do most of my shopping from home on Amazon, and get most of my entertainment through Netflix or Hulu, so that’s cuts out a lot of what cars were used for in previous generations.

    Awesome examination of the “millennials just aren’t buying cars” trend.

  4. Vera: In a way, yes! It’s almost a little like those crazy science fiction books about the future. However, once the idea of a car instead of a horse and buggy was almost impossible to believe. We’ll see how millennials’ “real” and “second” lives blend together to create a new normal. I appreciate your comments!

    Lydia: I know exactly what you mean. I’m from Knoxville, TN where you need a car to get around. I never could imagine my life without a car–but I know plenty of parents who still drive their teens everywhere well past license age! Now that I live in Boston, I’m happily car-less. We’ll see if/how this trend will take off in rural areas. Thanks so much for commenting and stopping by the website.

  5. Jerusha says:

    Hi Lindsey, I just stumbled on your website (from Paul Angone’s All Groan Up, if you’re curious!), and I just wanted to say I love your site and your proactive approach to finding a job. Congrats on your new position!!

  6. […] it’s not easy to market cars to a generation growing more apathetic towards them, the stakes are high for auto manufacturers. By 2025, millennials will account for 75% of vehicles […]

  7. Karen says:

    I never could drive so lived my whole life, walking or biking everywhere, using mail order and now internet. Netflix or Hulu streaming… and I live in a small town of 4000 people and am 54! I never was mainstream.

  8. […] estratégia de marketing foi utilizada no início de 2013, e teve como principal propulsora as pesquisas demonstrando claramente a falta de interesse pela posse de um carro pela geração millen…. O resultado financeiro certamente não foi o esperado, já que apenas dois carros alcançaram suas […]

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