A common misconception is that millennials (people born between 1982 and 2000) are ruining all industries – especially the car industry. Back in the 1970’s and 1980’s, young people looked at a car as a right of passage, and it was something that they didn’t think they just wanted, but something that they needed. Today, young people (mostly in their 20’s) drive 20% less than their parents did. But why? The main reason is that cars are expensive, and young people look at it as more of a luxury than a necessity. Millennials also have different values and mindsets than baby boomers do. It isn’t necessarily true that millennials are not buying cars, they just aren’t buying as many NEW cars. More than 80% of millennials said that they plan on purchasing a car within the next two years, so it is not like they do not want cars. A lot of young people are also in the market to buy used vehicles as they are less expensive. Many young people also have an interest in leasing vehicles as it can potentially have a shorter term than if you were to purchase a car.
What Millennials Make
On average, it costs around $8,000 to $13,000 a year to own a vehicle, and the average income for a millennial is $44,093 according to Statistics Canada (which is on the higher end of the wage spectrum). A lot of young people are still working minimum wage jobs, which before taxes only makes them about $30,000 to $35,000 a year, depending on how many hours they work. On the higher end, millennials would have to spend about a quarter of their income to have a vehicle, and on the lower end would have to spend almost half of their yearly income to afford to have a car. This also doesn’t take into account the amount it costs to buy gas, have insurance and get regular maintenance.
Millennial Values
Values that young people have today are so different than the values of generations before them. Millennials are tech savvy, and are very much concerned with the environment. Fortunately, automotive manufacturers are noticing these trends, and have taken it as an opportunity to market themselves better to this younger generation. Things like infotainment systems, back up and lane changing assistance were something that you only found in the more luxury vehicles ten years ago. Now, almost every new vehicle on the market has advanced technology in them, which is something that young people appreciate. Another big concern is that cars can be gas guzzlers, which is not good for the environment. Millennials are aware of the amount of fuel emissions that gas powered vehicles produce, and this is something that is a big concern for them. Manufacturers are aggressively moving towards having more and more electric vehicles on their line ups, and this is something that they hope will be very attractive to young people.
How Can Millennials Save Money on a New Car?
So many young people are unaware about the services that are available that can help them save on a new vehicle purchase. CarCostCanada™ is an amazing online tool that has helped thousands of Canadians when purchasing a new car. This service will also give them the power to negotiate a price on a car, and since most millennials are first time car buyers, this will give them ease of mind when they walk into a dealership and they can feel less intimidated when they go to look at new vehicles. Consumers can also use this tool if they are interested in leasing a vehicle. Although millennials have benefited from increased wages over the years, wages have not kept up with inflated living and quality of life expenses. Millennials need whatever they can to save as much money as possible when buying a car. Also, with the attractiveness of electric vehicles to young people, they would benefit greatly from CarCostCanada™’s service. Electric vehicles can be very expensive, and if a young person could save thousands on a new EV, this may make them more inclined to buy one.
It is important that the car industry does not alienate themselves from an entire generation. Instead of blaming millennials for ruining an industry all together, it is important for companies in the automotive industry to market themselves better to this generation. It is not that millennials are not interested in buying a car, it is that they have a different mindset than baby boomers, or gen xers do.
If you are interested in purchasing a new vehicle without breaking the bank, check out CarCostCanada™. We offer dealer invoice price reports that could save you thousands on a new vehicle, and will give you the power to negotiate when you walk into a dealership. Call us or visit our website for more information on how this online service works.
Article By: McKenzie Dolan