Staying away from cars
The automobile has been a staple of American society and culture for almost a century. Decade after decade, car ownership increased. But as N.C. State University economist Mike Walden points out to his wife, Mary, we are seeing changes in those trends, especially among younger households.
“Well … you’re taking me back. I can remember when I turned 16, I couldn’t wait to get a car, and I don’t know what I paid my dad, but my dad actually sold me his 1956 Oldsmobile. Kept that a couple of years, and then I bought an old beat up Volkswagen Rabbit or actually Volkswagen bug. You rode in that, I remember. So, I just, I was one of those kids (who) just couldn’t wait to have a car.
“What we’re now seeing however, Mary, is what I went through is becoming less widespread. We’re seeing that car ownership for young people, and specifically here we’re looking at people under the age of 34, has actually been going down. And that’s a surprising statistic. Young people are actually buying cars at a lower rate than they did in the past.
“The big question (is) why? Well, lots of potential reasons. Number one, young people are staying in school longer. So when they’re in school, they probably have less need for a vehicle because they’re living near campus, taking public transportation, et cetera.
“Second reason: student loans. We all know that that’s a big issue now. So when a child or young person gets out of college, they’ve got to pay off the student loans, so maybe they don’t have the resources to put toward a vehicle.
“And then third reason, young people are delaying marriage, and they’re delaying having children. And, of course, when you have children, your need for a vehicle becomes greater. So if they’re postponing that happy event or those happy events, that’s going to probably postpone their need to have a vehicle.
“Whatever the reason is, this is a very, very interesting trend. It has car dealers obviously watching very, very closely.”Category: Economic Perspective