Hot on the heels of claims that Millennials are buying houses come stories asserting that Millennials are suddenly big car buyers. We pointed out the flaws in the home-buying story earlier this month, and now let’s take a look at the car market.
The Chicago Tribune offered up a feature presenting “The Four Reasons Millennials are buying cars in big numbers,” assuring us that millennials just “got a late start” in car ownership, but are now getting credit cards, starting families and trooping into auto dealerships “just like previous generations.”
Similar stories have appeared elsewhere. The Portland Oregonian chimed in: “Millennials are becoming car owners after all.”
Not quite a year ago, we addressed similar claims purporting to show that Millennials were becoming just as likely to buy cars as previous generations. Actually, it turns out that on a per-person basis, Millennials are about 29 percent less likely than those in Gen X to purchase a car.
We pointed out that several of these stories rested on comparing different sized birth year cohorts (a 17-year group of so-called Gen Y with an 11-year group of so-called Gen X). After applying the highly sophisticated statistical technique known as “long division” to estimate the number of cars purchased per 1,000 persons in each generation, we showed that Gen Y was about 29 percent less likely than Gen X to purchase a car.
More generally though, we know that there’s a relationship between age and car-buying. Thirty-five-year-olds are much more likely to own and buy cars than 20-year-olds. So as Millennials age out of their teen years and age into their thirties, it’s hardly surprising that the number of Millennials who are car owners increases. But the real question—as we pointed out with housing—is whether Millennials are buying as many cars as did previous generations.
The answer is no.
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