For years, the auto industry has feared what appears to be a lack of interest in cars among Millennials. Automobile purchases appeared to grind to a halt, and millennials appeared to be rejecting car ownership in favor of public transportation, and other, alternative means of transportation.
However, the tides seem to have turned. Millennials are making car purchases in greater numbers than ever, out purchasing every demographic except baby boomers at the dealership.
As it turns out, millennials weren't eschewing car purchases so much as they were delaying them.
So what triggered the purchases? What reasons do millennials have to develop their interest in motor vehicles now?
1. Improved Economic Situation
Millennials are slowly aging up, and that means many are getting to more financially stable points in their lives.
Although car purchasing slowed down for the generation, as millennials age into the next bracket they're finding that not having a car is becoming difficult to maintain.
After all, the United States is still primarily a sprawling, car-based country. Employed millennials need cars to get to work. To avoid building debt, they' re looking to lease a car instead of buying one.
Nevertheless, millennials are slowly aging into the economy and into the kind of adult lifestyle that demands a motor vehicle and they're finally stepping up to the dealerships.
2. Cheap Gas Prices
Gas prices across the country have reached stunning lows. For millennials who remember the difficult times of only a few years ago, when gas prices hovered near or above four dollars a gallon, the current low prices are a plus to owning a vehicle.
Gas prices have dipped due to increased production across the country, as the U.S. finds new resources to avoid relying on other countries for oil.
This has been a hit to the oil industry, but a stellar deal for everyone else, including millennials who are more price-conscious than previous generations, and more wary of the hidden costs associated with car ownership.
3. Suburban Lifestyles
Although we glamorize city life, millennials are overwhelmingly looking to the suburbs for their first homes.
Rather than bucking the trend, millennials are surprising everyone by behaving exactly like previous generations have, with a slight delay in purchasing age.
As millennials move out to the suburbs, they'll need ways to get to their city jobs, and suburban public transportation is next to nonexistent in many places.
4. Low interest rates
Car loan prices have remained surprisingly low in recent quarters. This means that millennials have become more and more willing to take out auto loans, now that they feel more comfortable about the amount of debt they're getting into.
Millennials, being the savvy shoppers they are, are taking out smaller loans than their elder counterparts and purchasing used cars more often.
They're not interested in taking a big risk with their vehicles, just the benefits of having personal transportation.
5. Improved technological features
Car brands are finally figuring out how to market to millennials. Among their needs? Better technology, all around.
This means cars are getting more tech-savvy. They're connecting to phones, they have full media capabilities and they can adapt to a changing technological landscape.
They also have alternative fueling methods and improved safety technology.
Even more importantly, dealerships are finally figuring out what kind of information millennials want to find online. Websites are becoming more robust, with interactive displays and better information available for millennials to browse.
Millennials were never going to abandon cars, despite the fears of the auto industry; they were merely waiting for an improvement in their economic situations. Millennials are financially savvy and shrewd decision makers, and the auto industry is finally catching onto the new demands.