- State Farm / Flickr
The pendulum has swung. Five years ago, the auto industry was terrified that cash-strapped, over-indebted millennials would be the first generation in history that actively shunned car ownership.
But as the economy has improved and millennials have, you know, grown up, they’ve joined the auto-buying bandwagon.
Perhaps reluctantly, as it turns out. NerdWallet did a survey recently, in collaboration with Harris Poll, and found that 75% of 18 to 34 year-olds are thinking about buying a car in the next five years.
But 70% of those surveyed were surprised at how much it costs overall, including maintenance and insurance, to own a car; and 43% called car ownership a “hassle.”
So even though millennials are coming around on the most worrying trend, they just can’t seem to avoid being statistically annoying about what it takes to do complete one of the most basic adult skills in American life.
The only things more expensive than buying and owning a car, for the average person, is paying for college and buying house. And if you consider the data, those two things are still good investments. Houses will just about outpace the rate of inflation over the long haul, beating basic savings accounts while providing you with shelter, not to mention that it’s a useful financial instrument if you need to borrow against your equity at some juncture.
Going to college ensures that you’ll make notably more income than people who don’t. It will also insulate you against unemployment; jobless rates are lower for college grads that for folks who only have limited college, and they’re much lower than for folks who stopped at high school.
Buying a car, on the other hand, is like setting money on fire and throwing it down a hole.
But that’s the way it has always been. The millennials’ parents, the Baby Boomers knew this and were overjoyed to do it, because a car means personal mobility and freedom. Generation Xers also knew it; their parents and grandparents were the ones who bought a new car every two years.
Gen Xers also got to spend lots of time in cars, being shuttled between divorced parents’ homes, listening to mom or dad complain about how hard it was to make the payments and how much a new set of tires was going to cost.
The NerdWallet/Harris survey seems to indicate that millennials just weren’t paying attention. Or perhaps they missed out on the joys of cutting lawns for two years to make enough to buy a well-used Volkswagen Rabbit, which broke down six months later, right after the new brakes had been paid for.
They’re coming late to the car-ownership learning curve. Over time, I predict they’ll get used to it. It is a hassle. But it’s an almost inevitable one.