Young people are buying fewer new cars

Research by S&P Global Mobility showed that the share of new cars purchased by people aged 18-34 fell from 12% in the first quarter of 2021 to less than 10% in recent quarters. In contrast, the share of buyers over 55 years old increased from 45% to almost 49% over the same period.

Statistics indicate that young people are increasingly choosing used cars or abandoning personal transportation altogether in favor of car-sharing and public transport.

Financial difficulties of the youth

The main reason is rising prices. Monthly car payments have increased by 30% over the past four years, and one in five new cars costs over $1,000 per month. Furthermore, young people are facing the resumption of student loan payments, which were frozen during the pandemic.

These factors are forcing young buyers to seek alternatives: used cars with lower insurance, car-sharing, or public transport, especially in large cities. Some manufacturers are already predicting that the traditional model of car ownership will gradually disappear.

Despite the overall decline, young people aged 18-34 still bought 1.1 million new cars last year. Compact crossovers remain the most popular, but the situation could change with the advent of affordable electric vehicles.

Interestingly, automotive brand marketing is often targeted specifically at young buyers, although in reality they constitute a minority among customers. Perhaps it is time to review this strategy and pay more attention to the older generation, which is effectively shaping the new car market.