Clocking Fewer Miles Car Buying Is Down and We’re Driving Less. Has the Love Affair with the Car Come to an End?
Make no mistake about it. People are driving less. We are clocking fewer miles.
“The love affair with the car is over,” says Jack Trout, founder of a strategic marketing firm in Greenwich, Connecticut. Trout blames traffic, high energy costs and the urban migration trend. Today’s message coming from those under 35, he says, is “’Do I need a car?’ rather than ‘Do I want it?’”
Generation Y—or people between the ages of 18 and 34—simply can’t afford cars the way previous generations could. “Their share by age group has fallen,” says Lacey Plache, chief economist at edmunds.com. “They don’t have the financial means to buy cars and their unemployment rate is higher than their counterparts before the recession.” There are approximately 70-80 million members of Gen Y. When the Baby Boomers were born (between 1946 and 1964), they totaled approximately 76 million.
Aaron Bragman, senior analyst at IHS, an international economics forecasting firm, knows a graduate student who is also an employee at a Virginia university who dumped his car in favor of a bicycle and public transportation. In his early 30s, the friend rarely used the car, and grew tired of making car payments, says Bragman.
Two researchers, Michael Sivak and Brandon Schoettle, at the University of Michigan Transportation Research In-stitute in Ann Arbor, say that young would-be drivers would rather hang out online than meet up in person. “We found that the percentage of young drivers was inversely related to the availability of the Internet,” Sivak says. In other words, “virtual contact through electronic means reduces the need for actual contact.”
The Sivak and Schoettle research showed the percentages of persons 19 years old with a driver’s license were 87.3 in 1983, 75.5 in 2008 and 69.5 in 2010. The results were obtained by using driver-license and general population data from the Federal Highway Administration and the U.S. Census Bureau.
Sivak adds that young people have other reasons to forgo car ownership besides online surfing: They don’t have the money for such a hefty purchase and the related insurance, they are concerned about the environment and are moving to cities with good public transportation like New York and San Francisco
Gen Y may also not share the material values of Gen X. A recent exchange from New York Times readers followed an article titled “The Go-Nowhere Generation,” that suggested that Generation Y lacks drive. One young commenter argued that young people question the need for new cars, dishwashers and travel.
And vehicle ages are going up, too. U. S. drivers are holding onto their cars for an average 11.1 years according to Polk, a global automotive market intelligence firm, which analyzed national vehicle registration data. “The average age of a car has also gone up in a fairly astounding way,” says Jay Baron, Ph.D., president & CEO of the Center for Automotive Research.
For those between the ages of 65 and 75, car buying has increased, according to Plache. She says older Americans are buying new cars because they continue to work as the value of their 401ks and houses decline.
But across the country, people are driving less. “The chart showing the vehicle miles traveled (VMT) at the national level was pretty astonishing until the 2000s,” says Adie Tomer, senior research associate at the Brookings Institution. “Since cars have been rolling off the assembly lines in Detroit, we’ve had decades and decades of increases as measured by vehicle miles traveled. Cars became more affordable, women entered the workforce and there were more drivers on the road with the suburbanization of America and suburbanization of jobs.”
Now, “Driving on the road is flatlining,” says Tomer. The VMT research tracks the odometers of every car, truck and motorcycle across the country, calculated from those roadway cables you run over when you drive. From December 1956 until November 2007, national VMT increased from 631 billion miles to 3,039 billion miles,” he says, or 381.6%. From November 2007 to March 2012, national VMT decreased by 99 billion miles, or 3.25%. This five-year period was the first sustained drop in VMT in the country’s history.
MT per capita, the amount of driving per person, peaked in June 2005 at 10,113 miles and has since dropped by about 700 miles per person, according to Tomer. “We are at the level we were in the summer of 1998. But we have added 38 million people in the U.S.,” he says.
While the love affair with the car as we know it may never return, “the car is still with us,” says Trout. And today’s lull in purchasing may usher in a new era of car ownership focused on electrics, hybrids and an efficiency-first mentality.