Looks like young adults are finally ready to buy a new set of wheels.
Continue Reading Below
Drivers under age 34 were noticeably absent from the auto sales market during the financial crisis and following recession, but new data shows they are finally financially comfortable enough to make the big purchase.
Lack of face time and more online socializing used to carry the blame for this age group’s lack of interest in becoming a car owner, but data presented at an auto industry conference in Northern Michigan this week shows the decision was more about not being able to afford the costs associated with a car, according to the Associated Press.
The AP reports 18 to 34 year olds accounted for more than 14% of the U.S. new car market five years ago and that share fell to 10.5% in 2011. Last year, 12.3% of people in this age range purchased cars, and experts expect the trend to continue.
“There was a lot of speculation about how the Internet could somehow replace the car for a lot of things that we used to do, like drive to the movies,” says Carroll Lachnit, features editor for auto site Edmunds.com. “Our own research shows that these people were financially devastated, so it’s not surprising that they couldn’t make these purchases during the recession.”
As the economy continues to improve and people in this age group begin to find jobs, they are showing more interest in driving, according Kristen Anderson, analyst for TrueCar.com, an auto price comparison site.
Continue Reading Below
“People still need a car to get to work, visit friends and take road trips; so young people will want to buy again,” says Anderson.
If you are a young person, or a family looking to buy a car for your teen or college grad, here are a few expert tips to consider:
Car-Buying Tip No.1: Set a Realistic Price Point
Anderson says to consider your monthly budget and transportation needs and determining a price point on how much you can spend on a new car.
“Part of this is really determining what your monthly budget will be—will you be able to put 20% down on a vehicle? If you have student loan payments, think of what you can actually afford so you are not in a situation having difficulty with monthly payments.”
Car-Buying Tip No.2: Think of Your Needs
Evaluate how often the car will be used, travel patterns and driving lengths when deciding on what kind of car to pursue.
“Think about how many miles you will drive, and the hobbies that you have that may require a bigger car like an SUV,” Anderson says.
Parents looking to get their teen a car might have different expectations of car necessities than their child, says Lachnit. “Teens may be interested in a small car, because it’s inexpensive and they can afford it on the money they may now be earning. It’s sporty, cute and powerful—the exact opposite of what parents may want.”
Size plays an important role in overall safety, she says, and a midsize sedan will provide more security in a crash than a smaller car.
Car-Buying Tip No.3: Do Your Research
Car research and comparison can be tedious, but necessary. Anderson recommends considering price points and see what people in your area are paying on average for the car you want.
“Set a realistic purchase price—use manufacturer websites and consumer reviews,” she says. “It’s very easy to do research right now.”
Then you can work with a dealer to secure financing, or potentially get a loan from outside the auto dealer if necessary.
Car-Buying Tip No.4: Test Drive Before You Buy
Make sure the model you want drives smoothly and has the features you require.
“Teens may be interested in a big engine, or something as sporty as they can afford,” says Lachnit. “A four-cylinder engine will be powerful, but will not be as tempting for street racing.”