After improving their share of sales last year, Millennials have continued their return to the car-buying marketplace so far this year. According to Edmunds.com, these 18-to-34-year-old car shoppers are buoyed by factors such as improving income and employment, more household formations, and increased consumer confidence, according to Lacey Plache, chief economist at Edmunds.com.
New car-registration data from Polk found that Millennials bought nearly 30% less new cars in 2011 than they did in 2007. As sales in the auto industry grew to the tune of 14.5 million units in 2012, Millennials outpaced nearly all other age groups, save for the 75-plus bracket.
That’s good news, especially considering some analysts feared Millennials were much less interested in owning cars than previous generations were, thanks to factors such as a decrease in licensed drivers in this age group, their penchant to prefer socializing via social networking, and their tendency to live in urban areas where public transportation is a more feasible option.
Millennials may still have a smaller share of sales, but in every income level Edmunds found, except the $150,000-and-up sector, consumers ages 25 to 34 buy luxury cars in a pattern similar to older buyers with the same income. Additionally, in just about every income level, 18-to-24-year-old Millennials buy a larger share of entry and midrange sports cars than their elders.
Though Edmunds’ recent findings offer a positive outlook for these younger car buyers, there are still hurdles that could stunt car sales by this group. A tough job market for those under 25 and slow income growth for older Millennials mixed with their having higher student-loan debt than their predecessors could affect these consumers from obtaining other loans, such as those for cars.
But, Millennials have kept their 2013 share of sales above 2011’s, and a recovery in the labor market, which has added about 160,000 jobs per month this year, can only help push that number up.
