Auto sales to people ages 35 and younger fell 4.5 percent in 2019, according to J.D. Power. In contrast, sales to those 56 and older grew 1 percent.
The difference illustrates two market shifts.
First, carmakers are making fewer small sedans and hatchbacks and are producing more SUVs and trucks, which are selling strongly while gas prices are low.
Sales of cars priced at $20,000 or less plunged 20 percent last year.
Second, those larger vehicles are more expensive, priced beyond the reach of many millennials and Generation Z-ers. Older adults generally have more savings and higher incomes to be able to afford luxury cars and $50,000 pickups.
The average new car price last year was $33,600, about $1,100 more than in 2018. New tech features helped boost the price.
The average monthly payment for a new car in 2019 was $566. Used cars carried a payment of about $415.
“The financial challenges that young consumers face are multifaceted,” including student debt and high rent in many urban areas, said Tyson Jominy, J.D. Power’s vice-president of data and analytics. “We can’t discount the role that higher monthly new car payments and insurance play in damaging sales.”
Ride-hailing services also help to dissuade young people from going into debt to buy a car.
U.S. auto sales may have peaked, dropping 1 percent last year after more than five years of growth, reaching a record 17.6 million 2016.
TRENDPOST: Auto sales will continue to soften as younger generations, such as millennials who earn 20 percent less than boomers, make less money while falling deeper in debt.
Indeed, the “wealth defect” is a primary motivation for younger generations solid support for Democratic presidential candidate Bernie Sanders, who promises them a range of free government services and benefits if he wins the 2020 Presidential Reality Show.®