While the Great Recession strained the budgets of most households, the financial contraction hit the youngest group of consumers, the Millennials, particularly hard. This group, between the ages of 18–29, has seen higher than average unemployment rates and the consumers are also struggling to pay back large student loans. To fund themselves, many Millennials have turned to credit card debt. These problems have resulted in another noticeable trend. Millennials are driving less and buying cars at a lower rate than their predecessors.
A new study by KRC Research, funded by ZipCar, indicates that though this group has increased in size between 1995 and 2009, the number of miles driven by younger consumers has dropped 7.7%. Here are other key findings of this study:
- Millennials are choosing to drive less for environmental reasons.
- This group would drive even less if they could find good alternative sources of transportation.
- Car ownership is prohibitively expensive for many in this age group.
Nearly half (45%) of Millennials say they strongly or somewhat agree that they have “consciously made an effort to reduce how much I drive.” This compares to 24% of consumers who are age 55+. At the same time, 68% of older consumers agree or somewhat agree that the cost of car ownership is a challenge. About 80% of Millennials who are between the ages of 18–34 say the same thing.
The study also found that 23% of Millennials strongly agree that they sometimes spend time online with friends rather than visiting in person and making a trip that requires driving.
Regardless of the study's implications about the nature of socializing, younger consumers, like everyone else, need a way to get to work and to run errands. Their reduced rates of car ownership means a marketing opportunity exists for public transportation providers as well as rental car companies. These types of businesses will likely increase promotions targeting the Millennials.[Source: Millennials & Driving. KRC Research for ZipCar. November 2010. Web. 30 Nov. 2010]