It would appear to me, as a 25 year old college grad, that I and my peers are spending just about every dollar that we are able to make just to get by. That doesn't give us much opportunity to make purchases that require substantial down-payments in addition to financing, like vehicles and property.
Prices have inflated so dramatically since our parents' generation, on virtually everything, that saving up enough money to put 10-20% down on a major purchase, like a home, requires 5-10 years of savings. Then there is the job market uncertainty, where one cannot be assured that it will even be possible to remain employed in the same area more than a couple years down the road. Under such unstable conditions, tying oneself down into a home that it may not be possible to sell when circumstances dictate a change is a losing proposition.
Yes, it was an odd article that seemed to imply that "Gen Y" doesn't want new cars, rather than they simply can't afford the luxury of a new car.
The funny thing is that this is a tragedy for car makers; but for the rest of us, even Gen Y, is it really all that bad? Isn't this just a natural way of reducing consumerism, and reducing impact on the planet? What if this article was lamenting a drop in fast food consumption by Gen Y, would that be tragic to anyone other than fast food companies?
> "Gen Y" doesn't want new cars, rather [...] they simply can't afford the luxury of a new car.
The bay area certainly is filled with plenty of 20-somethings who can afford the luxury, and yet people still don't seem to want it. Among people I know, I can think of multiple couples with income in the quarter million a year range who share a 5+ year old beater as their only car, if they have a car at all.
I moved to San Francisco with a car, but it wasn't very useful most of the time, since everything I needed was in walking distance. Also, parking and street cleaning were a giant pain in the ass.
This is because the bay area is a pathological case in every respect. 20-something couples with a ~$250k household income are as rare in the rest of the country as parking spots are in San Francisco.
The worst part of this is back when I was younger, I could go out and buy a decent used car for cash. 25 years ago a 6 year old sedan with about 70,000 miles on it was around 3 - 4 grand, or less than 2 months pay. Now you can't get a car that is under 10 years old without taking out a loan, and at that point you might as well buy a new car.
Many of the young people who can afford cars live in cities where cars are not necessarily required. (See car ownership patterns in Europe as compared to the US for a more extreme example.)
There are two separate divides: can afford car vs can't, and do want car vs don't.
Prices have inflated so dramatically since our parents' generation, on virtually everything, that saving up enough money to put 10-20% down on a major purchase, like a home, requires 5-10 years of savings. Then there is the job market uncertainty, where one cannot be assured that it will even be possible to remain employed in the same area more than a couple years down the road. Under such unstable conditions, tying oneself down into a home that it may not be possible to sell when circumstances dictate a change is a losing proposition.