Wednesday, Jul. 03, 2019, 10:54 AM
Forget what you think you know about millennials* and their relationship with automobiles. Fears that Gen Y — those between 25 and 42 years of age today — would turn their backs on the all-American car-buying tradition are unfounded. To be sure, there was some initial cause for concern. As this demographic came of age at the end of the last decade, the Great Recession dampened the economic outlook. Jobs were scarce as their first student-loan payments came due. This, coupled with the unexpectedly rapid rise of ridesharing services like Uber and Lyft and alternative car-share business models like Zipcar, prompted many pundits to pronounce the death of conventional car ownership with this generation. What a difference a decade makes. Not only are millennials buying, they are buying big. A strong economy with low unemployment has provided this generation with the confidence to enter the market in large numbers. J.D. Power research shows that millennials are the driving force behind the used-car market. Gen Y consumers are buying 1.5 times more used vehicles today than consumers of the same age did six years ago. And what are they buying? Not the fuel-efficient sedans or coupes one might expect.
Over the past two years, J.D. Power has noted that SUVs are the vehicle of choice with this generation, as purchase activities largely concentrate on models such as the Ford Explorer, Chevrolet Equinox and Jeep Grand Cherokee.