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Millennials’ Vehicle Choices The Result Of Several Factors, Study Says

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Many futurists are predicting the end of the personal vehicle, and they cite Millennials purported aversion to automobiles as suggestive of the trend. But a new study fielded by QuoteWizard.

com, a Lending tree subsidiary that provides insurance quotes, suggests that the issue might be significantly more complex. While there is no doubt that Millennials are more likely than older generations to use public transportation and rideshare services, it might be as much a result of their circumstances as it is their supposed dislike for automobiles.

Millennials are more likely to be single and childless than older age cohorts, and that has significant transportation implications. So does the fact that Millennials are more likely to live in large urban areas than others.

Those circumstances alone make owning a personal vehicle less advantageous than for individuals who have children and live in the suburbs or a rural area.

Quote Wizard insurance expert Adam Johnson said the desire for car ownership might not be as pronounced among Millennials as in previous generations, but he didn’t feel Millennials are turning their backs on cars.

“I think the trend or hype of owning cool cars is less of a thing than it was for earlier generations,” he said. “Many young people today have other priorities, like traveling or paying off debt.

And studies show that Millennials prefer to spend their money on experiences over items.”

But instead of an aversion to cars, Johnson identified economic factors as a key reason vehicle ownership among Millennial consumers isn’t what it was among earlier generations.

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“With buying a home and raising a family being more expensive than ever, owning and maintaining a car is an easy area to cut costs for the younger generation,” Johnson said. “Many companies are offering commuter benefits, encouraging more people to leave their cars behind and use public transportation as a free option.

Another thing to consider is the effect the internet has on many daily interactions, from catching up with people that live one town over, to going to a store to buy things big and small. Technology serves as a vehicle in some of these cases.

While companies are expected to continue to offer benefits to commuters and the internet isn’t likely to vanish soon, other life factors are expected to prompt Millennials to develop a greater interest in car ownership over time, Johnson said.

“We would guess that as Millennials get married and start having families, it is only natural to migrate to bigger vehicles to accommodate larger families,” he said.

The study found that Millennials currently drive a mix of vehicles that is significantly different than the overall mix of vehicles on the road. The industry’s biggest trend over the past decade has been the move to crossover SUVs, but today’s Millennials most often drive sedans, the study found.

The top three car models most owned by Millennials are Honda Accord, Nissan Altima, and Honda Civic.

Are millennials choosing sedans because they want sedans or because in this market sedans are less expensive than SUVs?

“It’s likely a mix of both,” Johnson told forbes.

com. “The data shows that millennials are choosing to spend less on cars, and sedans are cheaper than SUVs.

But if things were equalized and sedans and SUVs were similarly priced, or millennials were willing to spend more on cars, would that change? We don’t think so, for a few reasons: Millennials are having fewer children than previous generations, and having children is a big reason to buy an SUV; gas prices, though not as alarming as they used to be, are still a concern; and Millennials prefer to live in urban areas, where SUVs are less appealing.”

The study also identified another big factor influencing Millennials to go slow on crossover and other newvehicle purchases — student loan debt.

With the average student loan debt at $33,000, according to the study authors, Millennials’ big-ticket spending has been curtailed.

The QuoteWizard study was derived from an analysis of auto insurance quote data from users of its website.

2018 data was filtered for drivers in the Millennial age range of 22 to 37 to find the most common vehicles driven by Millennials.

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