Prices for new and used cars have hit record highs, but so have their sales . And it isn’t just older Americans making these purchases as many have speculated. Millennials make up almost 30 percent of new car buyers but are also the ones mostly using ride-sharing services like Uber and Lyft.
How do millennials compare to Gen Xers and baby boomers when it comes to car ownership? We surveyed over 1,000 Americans about their perceptions and opinions on car ownership and how willing they would be to trade in their set of wheels for ride-sharing or public transportation. Keep reading to see what each generation had to say.
While millennials may be one of the biggest purchasers of new cars, they also made up the largest proportion of those currently making payments toward owning their vehicle. The opposite was true for baby boomers, with 73 percent owning their car outright, and only 20 percent still making payments. Baby boomers made up the highest percentage of those leasing, however. This may be because of the benefits one gets from leasing a car rather than buying as he or she ages. Leasing not only lowers upfront costs and monthly payments, but also rids seniors of the worry about depreciation when trading in their vehicles.
Baby boomers also anticipated keeping their current car for less time compared to Gen Xers and millennials. On average, millennials anticipated keeping their cars for 5.5 years, while baby boomers thought they would get rid of their current car after roughly 4.7 years. Millennials who buy cars are likely going to keep them longer due to the longer length of car loans which can create lower payments. This may also be why millennials reported the least amount of discomfort with their current car payments.
Favorite Car Features
A lot of thought usually goes into buying a car – more than just the make, model, or year. When choosing a car to buy, all three generations considered mileage, monthly payments, and safety rating the top three factors.
Compared to the younger generations, baby boomers were more likely to rank highly for features like mileage, safety ratings, and interior and exterior aesthetic. Gen Xers ranked monthly payments higher than the other two generations, while millennials ranked features like safety upgrades, environmental benefits, and tech features higher than the older demographics.
The price of a car doesn’t necessarily stop at the price tag. Car insurance, repairs, maintenance, and upgrades are all associated with owning a car. But which generation shells out the most?
As it turns out, baby boomers spent the most when it came to car insurance. While it is common knowledge that young adults are an expensive group to insure, baby boomers spent an annual average of $170 more than millennials. Older drivers may see an increase in rates due to both the increased risk of injury or death in a crash and the value of their vehicle, but they are also eligible for discounts they may not be aware of – including savings for low mileage drivers.
But millennials can see some discounts, too. As they enter the world of car collecting, they can reap the benefits of classic car coverage through certain insurers and decrease their auto insurance payments.
Cars to Keep
The majority of baby boomers anticipated no longer owning their current vehicle in five years, but America’s “middle child” (or Gen Xers) and millennials were about equally split on the matter.
Across all generations, the majority planned to upgrade or buy a more expensive car, with very few planning to make the switch to public transportation or ride-sharing services. Despite young adults being the most likely to use services like Uber and Lyft, less than 5 percent of millennials planned to switch from car ownership to public transportation or ride-sharing. Baby boomers and Gen Xers were more likely to consolidate their vehicles with their family or significant other.
Sharing is Caring
Not many people have active plans to push their cars aside for ride-sharing services, but how many are interested? Not that many, interestingly. Unless it comes with a significant drop in transportation costs, that is. Over half of all generations were uninterested in switching to exclusive ride-sharing or public transportation, but millennials were the most interested in the concept.
However, if transportation costs were reduced by 50 percent, half of respondents would consider making the switch. As of right now, though, trading in a midsize car and relying on Uber for transportation would only be cheaper for those who drive less than 9,500 miles a year. This may be beneficial for Americans over the age of 65, or teenagers who are just beginning to drive. Otherwise, being a car owner may be more affordable for many people.
Millennials straying from car ownership may be a myth, but our findings show they were the most open to ditching their cars. With ride-sharing companies like Uber and Lyft, there are more options to getting around. It seems older Americans, however, would rather stick with what they know – at least for the foreseeable future.
We surveyed over 1,000 Americans about their opinions and perceptions of car ownership. Fifty-four percent of respondents identified as men, 46 percent of respondents identified as women, and less than 1 percent identified as a gender not listed by our survey. Fifty-five percent of respondents were between the ages of 18 and 24, 31 percent were between the ages of 35 and 50, and 14 percent were 51 years of age or older.