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The Auto Industry is Confident That Young People Will Start Buying Cars Again Soon

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On: Mon, Aug 12, 2013 at 1:56PM | By: Elizabeth Puckett


The Auto Industry is Confident That Young People Will Start Buying Cars Again Soon

There’s been a recent trend in this country of younger people turning away from cars. Younger people have been losing interest in buying a car or even driving for the past few years, but the auto industry says they still have faith that younger drivers will get back into to market again as the economy improves for that age group.

Following the recession, younger consumers stopped buying cars at a significant rate. Americans in the age group of 18-34 made up over 14% of the buyers in the new car market just five years ago, but that number took a nosedive to 10.5% in 2011. Many different factors are said to contribute to the trend including having more access to public transportation, not being able to afford a vehicle or operate it due to higher unemployment/underemployment or the cost of going to school, and interacting more on social media than in person. One of the biggest problems has been unemployment in younger age groups, getting jobs has kept them from buying cars.

During a recent auto industry conference, hosted by the Center for Automotive Research Management Briefing Seminars, data showed that younger buyers are returning to the car market, although the upswing is very slow and inconsistent. Last year the auto buying rate for the18-34 group rose slightly to 12.3%.

What’s really unexpected is that many people even lost interest in getting a driver’s license altogether. The rate of licensing shows that driving is not as important as it once was. In 1984, 80% of people in this country aged 16-24 had their driver’s license. However, in 2010, that number fell to 68%. For the age group of 25-34 years old, 88% had their license in 2010, down from 95% in 1984.

Auto execs are confident that as the number of unemployed people drop and the economy continues to improve, the more younger people will become car buyers. "The younger buyer is broke," said Anthony Pratt, vice president of Americas forecasting for Polk. "This demographic has been the hardest hit, from unemployment, from net worth, from income—all factors that would influence demand for high-priced consumer goods like an automobile."

Pratt said he's not sure exactly when young people will start buying cars in big numbers again, but he's confident they will.




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