Millennials are Accelerating on Auto Purchases
During the past decade, the rise in car-sharing services, urban living and college debt payments led to doubts about Millennials’ desire to ever own a vehicle. Not anymore.
Automotive News reported that Millennials make up the fastest growing segment among vehicle buyers and likely will represent about 40% of the U.S. new-vehicle market by 2020.
Last year, Millennials — also known as Generation Y — purchased 4.1 million vehicles in the United States, accounting for 29% of the market, according to data from J.D Power and Associates’ Power Information Network. They now drive changes in automotive marketing and product features and are likely to influence future automotive developments more than any generation before them, experts say.
Because of the Great Recession, Millennials entered the market later than prior generations. As the U.S. economy hit the depths in 2008-09, millennials were having a difficult time finding jobs, and the cost of insurance was rising rapidly, said Mustafa Mohatarem, chief economist for General Motors.
But as the economy improved, Millennials started buying cars, Mohatarem said: “What we see is the share of new vehicles being bought by Millennials is increasing significantly.”
Jeff Schuster, senior vice president of forecasting with LMC Automotive in Troy, Mich., says Millennials have shaken off the effects of the recession.
“The Millennial was the buyer that was first pushed out of the market with the recession,” Schuster said. “They were late coming back, but they have come back. We are past that issue.”
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