EDITOR’s NOTE: The following study and report was originally published by LendEDU. The online poll was conducted online polling company, Pollfish. See article graphics below.
The automobile industry is constantly evolving, and quite fittingly, never staying still. In what direction is the automobile industry headed next?
To find the answer, LendEDU conducted a poll of car-owning millennials in which we asked them a series of questions related to their car-habits. Not only are they largest-living generation, but millennials will soon become the most powerful spenders in the U.S. Their spending tendencies will play a key role in deciphering the future of the American economy.
Future of Cars Looks Secure
In today’s world, it seems a new piece of technology comes out everyday that renders a similar, but older service obsolete. But, according to a few questions from LendEDU’s poll, that does not appear likely to happen with the automobile industry.
We asked 501 car-owning millennials the following question: “Do you consider owning a car to be a necessity in today’s society?” An overwhelming majority of respondents, 93.01 percent, said yes, while only 6.99 percent of millennials answered no.
A similar question immediately followed the aforementioned question with one modification: “In 20 years, do you believe that owning a car will be a necessity?” This time, fewer millennials, 79.24 percent, thought a car would be a necessity, while 20.76 percent believed automobiles will not be a necessity in 20 years.
Albeit a small percentage, it was interesting to see that nearly 14-percent more millennials thought that owning a car will become unnecessary in 20 years as opposed to now. As they have grown up watching new technological advancements wipe out entire industries, perhaps they foresee the same thing happening with automobiles. However, when we asked our poll participants if they think their children will own cars, 93.01 percent of them answered yes.
The following question was asked to 501 car-owning millennials: “Do you see yourself buying another car in five years?” 77.64 percent of respondents said they could picture buying another car, while 22.36 percent could not. It was interesting that the results of this question were quite similar to the results of the question in which we asked millennials if owning a car will be necessary in 20 years. Maybe, the automobile industry will slow down sooner than we think, or maybe most of the respondents are satisfied with their current cars and are not afraid to rack up the miles.
The answers we received for one of the poll questions proved that ride-sharing services like Uber and Lyft may be having a moderate influence on the car industry. When asked if the growth in ride-sharing services like Uber have made our respondents re-think car ownership, 16.57 percent of car-owning millennials said yes. Although the clear minority, 16.57 percent of millennials re-thinking car-ownership due to the rise of Uber and Lyft is a cohort that did not exist just a few years ago and is nothing to scoff at.
Finally, on to the subject of the cars of the future. We asked the following: “If possible, would you give up manually driving a car if it meant that you could have a self-driving car?” 57.49 percent of car-owning millennials said they could not give up manually driving a car, while 42.51-percent said they would. The results of this particular question were a lot tighter than anticipated and demonstrate the openness many millennials have towards self-driving cars-an openness that is not as prevalent with older American consumers.
When it came to green or hybrid cars, more car-owning millennials were in favor of purchasing an environmentally-friendly car. The simple majority of respondents, 50.10 percent, said they would prefer owning a green or hybrid car over a traditional car, while 49.90-percent would opt for a traditional car. Similar to the question pertaining to self-driving cars, millennials are clearly much more ready for the cars of the future.
How Do Millennials Handle the Costs of a Car?
It is no secret that cars are expensive and can become even more expensive over time with maintenance costs and unexpected accidents. Because of this, auto loans are a popular way to finance cars without breaking the bank.
We asked 501 car-owning millennials if they used an auto loan to finance their cars. More of our respondents, 51.50 percent, did not use an auto loan to finance their cars than those that did, which was 48.50 percent. This data falls closely in line with statistics from the Federal Reserve Bank of New York, which estimated that 43 percent of the U.S. adult population owes money on a car.
Out of the car-owning millennial respondents that have used auto loans to purchase their cars, 71.19 percent of them are still paying off their loans, while 28.81-percent are not making auto loan payments anymore.
Sticking with the same auto loan cohort, 53.91 percent of them answered yes when we asked the following: “Did you compare auto financing options online before purchasing your vehicle?” Despite the fact that 46.09 percent of respondents had not compared auto financing options, the results of this question were quite welcomed.
We asked car-owning millennials, “Which of the following best describes your feeling after purchasing a car?” 39.12 percent of respondents were surprised by the maintenance costs, while 60.88 percent stated that they were not surprised.
Interestingly, when the question was modified to discuss insurance costs, more car-owning millennials were surprised by the costs of insurance after purchasing their cars: 45.31 percent answered that they were surprised by the insurance costs. Meanwhile, 54.69 percent of respondents stated that they were not surprised by the insurance costs.
Miscellaneous Millennial Car Statistics
We wanted to pick up on some millennial car trends unrelated to the financial aspect of owning an automobile. Yes, cars are an effective mode of transportation, a serious investment, and a potential money-pit, but for many folks, owning a car is so much more than that: It is a hobby and a sense of pride.
We asked 501 car-owning millennial respondents the following: “Do you know how to change the oil in your car?” 67.27 percent of poll participants claim that they do know how to change the oil in their cars, while 32.73 percent were totally honest in their lack of oil-changing skills.
Next, we asked the same group of respondents if they knew how to change a tire on their car. Believe it or not, 80.84 percent of millennials stated they knew how to change a tire, more than those that knew how to change their oil. Only 19.16 percent of respondents answered that they lacked the knowledge necessary to change a tire.
We then posed the following question: “Do you view your car as a status symbol?” The majority of respondents, 66.47 percent, did not view their cars as status symbols, while 33.53 percent did see their automobiles as status symbols.
Judging from one of LendEDU’s poll questions, it seems that most millennials are satisfied with their decisions to purchase cars. When asked to describe their feelings after purchasing a car, 67.66 percent of car-owning millennials said “owning a car is not a hassle,” while 32.34 percent of respondents did describe car ownership as a hassle.
Finally, we wanted to find out how many millennials have driven for Uber or Lyft, or at least considered it. We asked this question: “Which of the following best describes your experience with a car?” 11.58-percent stated that they have driven for a ride-share program like Uber or Lyft. 38.32 percent of respondents answered with the following: “I have not driven for a ride-share program, but I have considered it.” And, the simple majority of car-owning millennials, 50.10 percent, said they have not driven for such a service and have not considered doing so.