Will Millennials Save The Car Business?

Hey, it happens. Gen X was considered too snarky and cynical and didn’t respect the gravitas of the world we live in. Parents of boomers looked askance at these dirty hippies turned greedy Yuppies. And so forth.

- Mark Rechtin

It is this sort of thinking that has colored the conversation about the future of the car industry. You can’t avoid the screeds about how millennials would rather have an iPhone than a car—or how they’re just fine having Uber or light rail fulfill their transportation needs instead of driving themselves. They’re just indifferent about cars, right?

There’s an element of truth there. Many millennials have had to delay acquiring new cars for major financial reasons: They came of car-buying age in the midst of the Great Recession and have suffered through years of McJobs—all while carrying staggering amounts of student-loan debt. And the average transaction price of a new car now represents a greater percentage of average incomes.

Who has money for a car—a used one, much less new—if making rent is a challenge? Any savvy investment adviser would tell you to dump a depreciating asset that sits idle 90 percent of the time.