
The Cheapest Generation - JumpCrisscross
http://www.theatlantic.com/magazine/archive/2012/09/the-cheapest-generation/309060/
======
andyking
I own a car now, simply because I tried relying on public transport for a year
and found the experience pretty depressing - it makes your day so very long (I
was basically doing 6am-7pm including commuting) and loses you flexibility. I
fell into a routine of coming to work, going home, and doing nothing else,
because it was so much effort to plan a trip anywhere other than the office.
It started to make me sink into something approaching a depression.

So here I am, with a car - but it's not a fancy brand-new £10,000 model with
crippling monthly payments. It's a slightly beaten-up 2002 Micra, I bought it
from a guy down the road for £600 cash, it doesn't use much gas. I don't care
how I look in it, whether it's 'cool,' I don't see it as a status symbol, I
see it as a tool for life.

Maybe that's the difference - younger generations don't see a house or a car
as a symbol of status or wealth, merely as something to be used, as a
necessity - just like you wouldn't choose your electricity supplier based on
how "cool" it is, we don't choose our cars on that basis either now.

~~~
Swizec
> younger generations don't see a house or a car as a symbol of status or
> wealth, merely as something to be used, as a necessity

And then there are fixies - impractical bikes that cost 700 euro simply
because they are cool. Whereas you can get a practical bike for less than 200
euro.

Maybe it _is_ that we are cheap, so those things that cost beyond a certain
threshold (like cars and housing) just need to work, whereas things under a
threshold need to work _and_ be cool.

iPhones also strike me as an example of this. Ray Ban glasses as well. A lot
of clothing stuff ... actually pretty much everything _but_ houses, cars and
the big expenses must be cool enough to be bought.

~~~
MengYuanLong
You may feel fixies are impractical but they carry benefits. The primary one
being better power transfer. Second, you can often make a cheap fixie by
finding an old frame, refurbishing it, and replacing the rear hub. Yes, you
can buy them for $700+ but unlike iPhones, there are a number of ways to
obtain one for cheap.

Further, a bike that costs less than $200 is certainly not a bike I would buy
for commuting. Having commuted without a car for over three years, I can
assure you that steel frames are not your friend and arguably not practical if
you want to enjoy your lifestyle.

~~~
mfringel
So, for those of us who know nothing about bikes, why are steel frames
suboptimal for commuting?

~~~
bencpeters
They aren't, IMO. They don't weigh much more (and seriously what kind of
commute do you have that weight matters that much? This isn't the tour de
france...)

The ride of a decent steel bike is much softer (less harsh) than an aluminum
bike. An old steel 10 speed with tension shifters (less fiddly/adjustment
prone) is my idea of a perfect commuter bike...

~~~
ef4
Was about to post the same thing but you said it all.

Steel vs aluminum is like vi vs emacs. People argue about it all the time, but
if you just go test ride some bikes you'll find out pretty quite which you
prefer.

I like steel. Aluminum is just too bone-jarring.

------
roc
> _"What if Millennials’ aversion to car-buying isn’t a temporary side effect
> of the recession, but part of a permanent generational shift in tastes and
> spending habits?"_

It's hardly surprising that people without the money for cars are of the
opinion they aren't so important anyway. Not being able to afford things tends
to draw into sharp relief the difference between wants and needs.

And I realize Ford's marketing department can't do much about the slow,
grinding recovery and thus are stuck worrying about long-term attitude shifts.
But until the demographics show millenials moving to _and staying in_ urban
areas where transit is a feasible option, I can't imagine it's legitimately
worth fretting over.

If millenials still choose to settle down to raise children in the suburbs,
car ownership is pretty much necessary.

The only real threat from lasting attitude change, is that perhaps millenials
will _vote_ for more transit projects and subsidies over more car/road
projects and subsidies and thus make it more feasible in more areas to not own
cars.

~~~
ganley
> _The only real threat from lasting attitude change, is that perhaps
> millenials will vote for more transit projects and subsidies over more
> car/road projects and subsidies and thus make it more feasible in more areas
> to not own cars._

We can only hope.

~~~
CWuestefeld
The trend for mass transit is to remove options from travelers, thus making
itself _less_ useful to us. As such, it's hardly worth funding. [1]

That's not to say that it must be inherently so. Just that, so long as these
projects are typical government projects that are expected to go over-budget
and over-deadline with no repercussions, they will be used as a tool for
political favors and cronyism, at our expense.

[1] [http://www.cato-at-liberty.org/denver-fools-the-wall-
street-...](http://www.cato-at-liberty.org/denver-fools-the-wall-street-
journal/) Quote:

The old-style public transit system used cheap, flexible buses whose routes
could be altered overnight to take people from where they were to where they
wanted to go. When Denver first built rail, it substituted expensive but
glamorous trains for inexpensive buses, but still allowed people to go from
where they were–provided they were willing to drive to a park-and-ride
station–to where they wanted to go–provided they wanted to go downtown. ...

This has been tried before, of course, most notably in Portland. How well did
it work there? In 1980, under the old bus-transit model, transit carried 9.8
percent of Portland-area commuters to work. By 2010, with seven different rail
lines and scores of transit-oriented developments, transit carried just 7.1
percent of the region’s commuters to work.

~~~
brewdad
Portland's transit problems stem from the fact that most of the region's job
growth over the past 20 years has taken place away from downtown. On a given
morning, there are almost as many commuters driving to jobs in the west
suburbs as driving to jobs in the city. Of course, the light rail doesn't go
to where the jobs are in the suburbs. Not without the need to walk
considerable distances or transfer to a bus.

~~~
CWuestefeld
_most of the region's job growth over the past 20 years has taken place away
from downtown_

I think that's central to the point of my linked citation.

People stubbornly insist on buying homes where they want to live, rather than
where bureaucrats claim they _should_. For a transit strategy to have any
success, it needs to address what people are actually going to do -- or at
least not pretend that it is doing so.

------
api
Myself and many other "millennials" are very reluctant to "buy" such things
because they can't.

What we can do is go into massive, enslaving, soul-crushing _debt_ for them,
something the smart ones are justifiably reluctant to do.

Real estate hyperinflation is particularly bad. A house is unthinkable to
anyone under 40 unless:

a) they've had a liquidity event, inherited money, or have a big trust fund.

b) they are willing to live in bumscrew nowhere or the ghetto.

c) they are willing to go into soul-crushing debt with the very real threat of
being rendered underwater and thus permanently shackled to that house without
bankruptcy or a short sale.

Screw that. Screw it all. Turn on, tune in, drop out.

~~~
runako
Or d) they are willing to move out of the top 5-10 mostly coastal real estate
markets. For instance, tech hub Austin, TX has a median home price of $122k.
The payment on that will be around $1k-$1100/mo including taxes etc. You'll
find very similar numbers in places like Atlanta, Houston, Dallas, Raleigh,
etc.

~~~
api
That's a valid point, but I didn't know there were any tech hubs or otherwise
interesting places with jobs that had house prices like that. That is lower
than small Midwestern cities with lousier economies. Why is housing so
affordable in Texas? Lack of stupid regulations? Loads of land?

~~~
runako
Both, plus c) it's not perceived as being as cool as living in a trendier
place and d) it's under-marketed relative to the bigger cities. Note also that
Raleigh/Durham has a smallish tech hub and housing is cheap there too. Oh, and
also e) the perception that nothing is interesting unless it happens in NYC or
SF (or other mega-city).

If you're willing to live outside a tech hub (which has other advantages),
you'll find that in most places in the US programmers make high salaries
relative to the cost of living, but the focus tends to be on the few places
that this is not true. Outside the top markets, $70k + bonus is more than
enough to be comfortably middle class (and own a home and car if desired).

------
brudgers
In the age of smart phones, the car has ceased being a vital communication
tool for young people. There's no need to drive to the mall to see if Paul is
there hanging out. A text will let me know that he's at Joel's party instead.
Another text and Steve will swing by in his car.

The housing situation is another matter. There's a glut. Credit is tight. Jobs
are scarce. And housing prices are going down. Millenials aren't stupid.

~~~
hnal943
You're right about smart phones, but I'm not so sure about housing. Credit is
ridiculously cheap, and housing everywhere is on sale. If you have a job, why
_wouldn't_ you buy as much house as you can afford?

~~~
goatforce5
> If you have a job, why wouldn't you buy as much house as you can afford?

Because interest rates are likely to go and then I wouldn't be able to afford
that mortgage any more?

I'm kinda thinking about buying a house, so I filled in an online mortgage
calculator to work out what sort of money i'd have to work with. It said i'd
qualify for a mortgage that was twice as high as what I think I need to get
somewhere really nice, or three times as high as what i'd need for somewhere
quite good.

I don't need that much extra debt to worry about.

~~~
brewdad
People buying as much house as the bank would approve them for rather than
what they could afford is what caused the first bubble. We bought a house for
2x our annual income 3 miles from work. We could have bought in a trendier
neighborhood but it would have come with an unreasonable mortgage and an extra
1.5-2 hours of commuting per day.

------
ganley
Aside from those whose livelihood depends on car sales, who have an obvious
incentive not to believe it, why is it so hard to believe that people might
simply not want to own a car? The whole tone of this article seems like: It
appears that millennials don't want to own cars, but that can't be right, can
it? If I could get away with not owning one, I certainly would. As it is, I
spend as little time in it as possible (much preferring to bike).

~~~
ZoFreX
I thought that assumption throughout the article strange, too. A factor no one
else seems to have mentioned (which admittedly only applies to transport, not
housing) is that public transport is, overall, getting better. In London I
have an Oyster card which actually gets me all the way to my dad's house too,
even though he lives well outside London. Something like this just would not
have been possible in the 90s, and now I can check how much money is on my
Oyster from my phone, and see live train and bus (!) times on it as well. Not
to mention that having tools like Google Maps makes using public transport in
an unfamiliar city a doddle, I just punch in a postcode and it tells me which
bus to get on, and which stop to get off at.

~~~
goatforce5
Although Londoners complain about their public transport, it really is
exceptionally good. For many routes within London it's quicker and far cheaper
to take public transport (or a bike!) than to use a private vehicle.

Most places aren't like that, unfortunately.

~~~
ZoFreX
While I would say that London's public transport is good (not exceptionally
good, Germany, Switzerland and Japan are exceptionally good, London is merely
good), I think:

> For many routes within London it's quicker and far cheaper to take public
> transport (or a bike!) than to use a private vehicle.

Is a rather poor way to look at it in the context of London, because walking
is often quicker than using a private vehicle here!

------
JoelSutherland
In 1985 the average age of a car on the road was about 6 years. In 2012, the
average age is over 11 years. This has a number of obvious implications on
new-car purchasing behavior of young people:

1\. It's much easier to buy a used car now since they have more years of
service in them.

2\. Getting a hand-me-down from a relative is possible.

3\. Culturally, getting a new car is much more rare so there is less pressure
to do it.

I think 3 is a huge factor. The social status a new car provides has fallen
dramatically.

~~~
bmj
_Culturally, getting a new car is much more rare so there is less pressure to
do it._

I agree, and this isn't just for Gen Y-ers, either. Most of my Gen X friends
(I guess I'm a Gen X-er, too) have no interest in purchasing new vehicles. My
wife and I have owned exactly one new car (which we then sold after 6 years to
purchase our camper van), and our current vehicle is ten years old. Shiny cars
just aren't the status symbols they used to be.

~~~
colomon
Funny, as a Gen X-er I was reading this as a story about somebody else, but
you're totally right. I'm 41 and I've only ever owned one new car. We bought
it when my wife was pregnant, because I wanted to make sure she had a good
reliable car for her 30-minute commute to and from work. That car has lasted
five years so far, and fate willing it will last at least another five. (Her
commute is only five minutes these days, and the carseat is in our purchased-
used minivan.)

It's really a crazy contrast from what I remember a number of adults doing
back in the 80s -- a new car every two years, regular as clockwork.

------
smoyer
Cars were never a good investment, and driving a new one off the lot will cost
you 20% (minimum). I'm quite a bit older than most HNers but have driven
reasonably good used cars for years. And now my two college-aged kids have
chosen cars they thought were cool ... a 1971 VW Super-Beetle and a 1991
Toyota MR2. These cars are both far more cost-effective than a new car ... the
key is to pick one that was well maintained! I honestly don't know how the car
companies can justify a price that is 1/4 the cost of a house (in many areas).

Houses on the other hand have always been held up as an investment, but I
think the millenial's have been affected by witnessing the housing melt-down.
Now is actually a good time to get into a mortgage (in many areas), but many
people will wait because they don't want to see their investment decline. You
read stories about the people who are underwater on their mortgage, but you
never hear about people like me who bought a house they could afford, made
payments and improvements and even with the collapse of the housing bubble, my
investment is worth twice what I've put into it.

But younger people view houses and cars as tools and I can honestly applaud
that view ... neither will bring you happiness by themselves.

------
nodata
Single page version: [http://www.theatlantic.com/magazine/archive/2012/09/the-
chea...](http://www.theatlantic.com/magazine/archive/2012/09/the-cheapest-
generation/309060/?single_page=true)

I don't like The Atlantic's title: it implys what is happening as negative.

~~~
hieronymusN
This is because our current economy is skewed towards consumption with real
estate and cars as the primary metric. I agree, I don't see it as a negative.
I'm Gen X and I don't own a house or car.

~~~
mattgreenrocks
I realized recently I'm more reluctant to own a house than have a baby.

~~~
hieronymusN
It all depends on where you live and what your local market is like. I have a
kid, and still don't need a car or house. I also live in NYC, so it's easy to
do that. If I lived someplace like Houston, where there is almost zero public
transport and houses are crazy cheap I might rethink things. That said, don't
buy into social groupthink, don't buy a house if it doesn't fit your
sensibilities.

------
lilsunnybee
This article is dumb. It seems to ignore the most obvious explanations for
these trends, and lumps together young adults in all socioeconomic classes and
geographic locations like they're the same (they're not).

Outside of urban areas, cars are pretty much a necessity. I highly doubt that
young adults in these areas aren't using cars at all, but it makes a lot of
sense that they would buy used or borrow friends or parents cars over owning a
new car, because low wages and unemployment tend to result in not having wads
of cash on hand to throw at owning a new vehicle.

For young adults in urban areas, cars have pretty much always been a nice-to-
have, but if you don't have the money for them (especially the extra for
parking in urban areas), public transportation will work, even though it might
not always be sexy.

Same with home ownership. Homes are the most expensive possessions out there.
If you don't have the money, credit, cushy job, you can't afford one. So
living at home, or with friends, or renting are the doable options, even
though home ownership is still highly desired.

The experience of middle and lower class young adults is much different than
their upper class peers. I imagine buying behavior really hasn't changed much
for the upper classes. But the large majority in the lower classes have the
greatest sway on the trends.

I find it fascinating that anyone would be baffled why these trends exist.
When youth and lack of experience mean shitty jobs and unemployment, its no
wonder the younger demographic aren't big spenders. If you don't have the
money, you don't have the money.

------
aravenel
I'm fairly sure the reason 21-30 year olds aren't buying houses and cars in
droves isn't because they are "quirky eco-conscious individuals" that your
marketing "isn't speaking to"... I'm pretty sure its mostly because:

1: Many of them don't have jobs (or have low-paying jobs) because of the
economy.

2: Many of them watched their parents drown in debt from houses and cars they
bought but couldn't really afford

3: Student debt.

No amount of marketing is going to fix that.

This quote alone just makes me shake my head: “I don’t believe that young
buyers don’t care about owning a car,” says John McFarland, GM’s 31-year-old
manager of global strategic marketing. “We just think nobody truly understands
them yet.”

~~~
rsheridan6
#3 is underappreciated. We have a generation that's going to be slaving away
for years to pay off large student loan debts that are at high interest rates
compared to a mortgage. Naturally they're going to be averse to wasting money
on an overpriced car when they could be paying a student loan instead, which
has a guaranteed rate of return of 5-10% (depending on the terms of the loan),
tax-free.

~~~
aravenel
Definitely that, but also the skyrocketing costs of a college education. The
days of paying your way through school by working summers and weekends are
over. Either you are lucky enough to have parents pay for your school, or you
are coming out of school with debt the size of some people's mortgages. There
goes your ability to buy a house or car...

Then factor in that for many folks, they spent that money on that education
and graduated to find out the only place that would/could hire them was the
local coffee shop for 20 hours a week, and there is no amount of marketing in
the world that is going to convince that person to buy a $30,000 car.

------
geargrinder
After watching their parents and grandparents obsess over material
possessions, why is anyone surprised when Millennials choose to prioritize
other things? Owning a bunch of stuff is a giant hassle and doesn't bring you
any more happiness. Perhaps they have just learned the lesson their parents
taught them.

~~~
theorique
_The things you own, end up owning you._ (Tyler Durden)

------
thaumaturgy
I'm sure it has nothing to do with the fact that 78 hours of minimum wage work
could pay the rent in 1980, compared to 109 hours in 2010 [1], along with the
other associated cost-of-living increases over the last three decades that
have come without comparable increases in wages.

I doubt that most people who felt financially secure and could afford a new
car wouldn't want to own a new car. Nobody really enjoys driving a beater, or
being forced to walk or ride a bike everywhere (aside from doing it for the
enjoyment of it), or trying to negotiate for rides with friends. Public
transportation in most of the U.S. is awful, so I don't see many people
choosing that over having your own shiny new car.

So the article briefly touches on the economic pressures facing young people
in mentioning the recession and student debt, but it spends most of its
paragraphs trying to paint some kind of cultural picture of "Millenials" as
being a neo-beatnik generation that worships sharing.

No, it's the economy, stupid. And not just recently, either; for the last 50
years at least, there has been a gradual trend towards ownership of things
like homes and cars costing more and more in terms of the working hours needed
to afford them.

If you are among the 3.8 million people making minimum wage (or less!) now
[2], a car is the last damn thing you want to own. You won't be able to afford
a good one, so you'll constantly be spending money on maintaining it, not to
mention that it will strand you one day and your minimum wage job will be more
likely to fire you for not showing up than the average cubicle job. Cars are
expensive to license, expensive to insure, and in California, old cars are
expensive to smog. Even better, if you fail to pay for any of this, you're
likely to receive a citation or ticket, which can quickly add up to more time
off work and more money out of pocket.

If you're young, you're far more likely to either be burdened by student debts
or be making minimum wage [3]. That means that the odds are that you're either
not living on your own, in which case a shared vehicle (either a housemate's
or a Zipcar or something else) makes more sense than owning your own, or
you're living on your own and you can't afford a shiny new Ford Fiesta without
a third full-time job.

Additionally, the entertainment industry tends to make more money during
economic downturns, and poor people are more likely to spend a greater portion
of their money on entertainment. If you can afford little, you might as well
have as much fun as you can, especially if your prospects for making more
money in the near future aren't that good. If you can hitch a ride to Burning
Man, that sounds better than spending the money of the ticket price and time
off work and food and everything else on mechanical work for your aging car.

Bah. This article was crap. It didn't have the quality I've come to expect
from The Atlantic.

[1]: <http://finances.msn.com/saving-money-advice/6952105>

[2]: <http://www.bls.gov/cps/minwage2011.htm>

[3]: <http://www.bls.gov/cps/minwage2011.htm> again.

~~~
JumpCrisscross
I'm 21, live in New York City, and let my driver's licence lapse over a year
ago. I don't plan on owning a house, preferring to drive my surplus wealth
into assets I understand better and which don't restrict my mobility, and
don't care to own a car.

This is not economically motivated - I have comfortable free cash flow and a
healthy balance sheet free of personal debt. I pay for a car service and take
taxis more than public transportation and pay more than the average U.S.
homeowner's mortgage payment in rent. I also spend a great deal more than my
parents, who find my behaviour and preferences baffling, on travel and
technology.

I won't disagree that a significant fraction of decreasing home and car
ownership may be explained by economic factors, but would caution that (a)
there is a significant minority that is making these choices as a matter of
preference, and, (b) for the rest, these behavioural changes, initially
motivated by economic conditions, could become ingrained to where they persist
beyond economic weakness. With the second point I'm not saying we will be a
"cheap" generation, just cheap traditionally, as we spend in categories we
value more than piles of sticks and little steel boxes propelled along asphalt
by exploding chemicals.

~~~
stephengillie
_[I] live in New York City ... and don't care to own a car._

Your lack of desire for a car has a LOT more to do with living in NYC than
your age or social status. You sound just like friends of mine from NYC.

~~~
JumpCrisscross
A global trend amplified by us "Millenials" in the U.S. is a preference for
urbanisation. Contrary to past generations, I don't plan on ever giving up the
pace and energy of the metropolis.

Thus our (and my) psychological shift could be explained as simply as a
preference for the hyper-connected urban lifestyle, with decreasing home and
car ownership flowing from that change in preferences rather than a direct
change in beliefs about cars or houses. Either way, the symptoms look set to
persist.

~~~
TheFuture
> I don't plan on ever giving up the pace and energy of the metropolis

Until you have kids, and you see how most urban school districts are run. This
is the same reason our parents left the city and moved to the burbs. Things
are not really as different now as we think.

Though now there is a huge opportunity to reduce the cost and drastically
improve K12 education. If our generation can break the entrenched bureaucracy
of public education, then I would say urbanization in the US could be more
than a consequence of Gen Y being poor and delaying starting a family.

~~~
api
Also, space. If you have kids, space will become more important.

As soon as you even think about having kids, absolutely everything about how
the suburbs are designed suddenly makes sense.

I still prefer an urban setting though.

------
carsongross
Cheapest Generation?

How about _poorest_ generation. Wages are stagnant and down in real terms.
Debt burden out of the gates (thanks to educational loans) are through the
roof. Social norms around employment security have collapsed. Returns in the
stock market have been flat to down _their entire sentient lives_. They've
seen home purchases wreck the financies of their parents (and especially their
X-er older siblings who bought at the peak.)

Oh, and under/unemployment is running over 50% for under-30's.

I don't know, Atlantic, maybe that little recession thing we were told was
over has something to do with it.

------
_delirium
This likely varies a lot based on location, but my impression is that suburbs
aren't as high-status with (some) young people as they used to be: many people
who in my parents' generation aspired to owning a house+garage+car now aspire
to live in the city and walk/bike/transit to work. That doesn't mean no
spending, though; young people are certainly shelling out to live in San
Francisco or Manhattan, even if they don't buy a car.

------
seiji
How can we reconcile "everybody is poor now" with all the teenage millionaires
and 22 year olds moving to California for six figure salaries?

Is everything we read here such an extreme case that the rest of the world has
no chance of catching up or competing (except in the überextreme sport of
Startup)?

~~~
uncoder0
Sounds accurate.

------
jorleif
Does the author of the article somehow assume that Millennials don't spend
because they don't buy cars or houses? Do they just stuff their money in their
socks, or might it be that they splurge on electronics and traveling? Of
course, one does not usually take up a mortgage for any of those, so that may
lead to macroeconomic woes in the short run, but in the long run I suppose we
can just expect consumption patterns to shift.

------
tgypsy
One word: insurance.

Rates for drivers under 25 are upwards of $200/mo in most urban areas, and
that's for the utmost basic 'one-way coverage' insurance. Under one-way, if
you are deemed even partially at fault in an accident, however minor, the
insurance pays the other's bill only - and essentially ensures you cannot
drive for the next three years as premiums quite literally skyrocket.

Anecdote from my university years: friend of mine was driving his van, had a
lady sideswipe him and send him into the median, immediately crashing into a
tree. She kept driving. The van incurred damage from the sideswipe. He was
found 100% at fault regardless. His insurance went from an already
preposterous ~$240/month to over $900. Nine hundred dollars per month - isn't
that what they charge for Lamborghinis? Fully licensed, clean record for 4+
years at the time, I believe he was 21. It was over two years until the rates
finally lowered to 'a more affordable' $300+/mo, which is AFAIK still what he
pays.

I currently pay $250/month, one-way of course. I could drive a '95 Civic or an
'08 BMW, my rate would differ ~$20/mo. The difference between dozens of
insurance companies is about the same - $20 more or less. I am 24.

FWIW, bikes are not exactly feasible for over half the year in our climate
(Toronto).

~~~
kapitalx
As I was reading your post I said to myself, this person must live in Canada!
turns out I was right :)

I used to live in Toronto, bought my first car when I was 20, got into an
accident at 21; I couldn't afford insurance and hence a car again until I
moved to the US at 23. It isn't the same here, my wife and I now pay $200
every 6 months which is 3rd party and liability (the one-way you mention) and
convers both of us. Also 1 accident in every 3 years is forgiven. (I live in
California)

------
k2enemy
Pretty sloppy reporting all around. They aren't even looking at the correct
statistics to address the hypothesis.

The article cites the percent of new car sales that were from 21 to 34 year
olds in 1985 versus 2010 and find that it falls. What they really want to look
at is the percent of 21 to 34 year olds that buy cars. You could have an
increasing percent of young people buying cars AND a fall in the percent of
car sales driven by young people if young people are making up a smaller
proportion of the car buying demographic. Indeed, 21 to 34 year olds make up a
smaller proportion of the general U.S. population in 2010 than in 1990
(<http://www.censusscope.org/us/chart_age.html>). It probably isn't enough to
reverse their result, but it soaks up some of the claimed behavior.

They make the same type of mistake looking at the percent of teens with a
license. Well, 13-15 can't even have a license, so what is happening to the
age distribution within "teens"?

Then you have all of the other causal effects that other commenters address.
I've come to expect this type of thing from the Atlantic blog posts, so I was
surprised to see that this was a magazine article.

------
qatalo
"MTV Scratch — a corporate cousin of the TV network responsible for Jersey
Shore", I like how they say "responsible" akin to a criminal action. +1

------
comicjk
> the share of young people getting their first mortgage between 2009 and 2011
> is half what it was just 10 years ago

I would like to explain to the author, very slowly and carefully, that
something happened in 2008 which made banks a bit more wary of lending to
people they would call "subprime." I tried to get a mortgage this spring and
failed, even with a good income and 35% down payment.

------
mbesto
I believe the next shift in the economy is towards an "Entertainment Economy"
(we're currently in an Service Economy, or least the Western world is). Which
means everything we do has to be part of some sort of entertainment or
experience. Anything that is a commodity, such as car, train, plane, or bus,
is no longer going to yield high profits. For example, it means companies like
BMW, Mercedes, Porsche, will win out, because they no longer sell something
that gets you from point A to point B, but rather they sell you the Ultimate
Driving Machine™. Heck, even cycling is now more of an "experience" than a
car. Cars are just plain boring to my generation.

------
theorique
When I last had a personal car, TCO was over 900USD per month (auto financing,
parking, insurance).

Since I live in an urban area well served by subways, buses, taxis, Zipcar,
and Uber, letting go of that high fixed monthly expense in favor of an a-la-
carte approach has been a great financial benefit for me.

Of course, if I had two kids, lived in remote suburbs, or had to commute to
suburbs, the equation would be very different.

But for now, for me and many other urban dwellers, the value of owning my own
car just doesn't compute.

------
dredmorbius
The difference between Gen Y / Millennials, and Gen X, is that the younger
generation is taking a hard look at the big consumer purchases and deciding
that they're either not worth it, or are simply unaffordable.

Gen X matured into a world not quite as harsh, but generally took on huge
amounts of debt to fund first school (not quite so much as current students),
vehicles, homes, and marriages. Only to be hit by multiple periods of very
uncertain economic times (recessions in 1989-92, 2001, 2007-2009), each of
which was followed by increasingly weak recoveries. The early 1990s recovery
not really picking up steam until 1995-6, the 2000s in 2005-6, and the most
recent recession still not really over.

In the early 1990s, it was popular to call Gen X the "slacker generation",
which I suspect was largely due to the economic conditions of the time. A few
years later, they were the dot-com generation, beavering away in the first
generation of Internet start-ups.

The 2000s are already being called a "lost decade". The 2010s are well on
their way to much of the same. Some sectors, notably tech, have been
countertrending, which may affect YC/HN impressions. But overall, economic
trends have been downward.

------
npsimons
_“I don’t believe that young buyers don’t care about owning a car,” says John
McFarland, GM’s 31-year-old manager of global strategic marketing. “We just
think nobody truly understands them yet.”_

I'll give him this: at least he's not blaming his customers or the market,
unlike some other industries I could name. I just wonder what he will do if
when he "understands them" he will have figured out that they don't care about
owning a car.

------
Shivetya
The closeout of the article is overly optimistic. Oh I know many Millennials
who are "investing" in themselves. Trouble is it is not education but instead
clothing, electronics, and expensive trips. I can understand why many do not
want a new car or even a car, it is far easier to declare you don't want a
thing than to admit you cannot afford what you want.

So there are two sides to this story.

------
codegeek
When I was 22, I only wanted to buy new cars and my very first car was brand
new. Slowly, I realized that used cars are a better option and never bought a
new one again. Now at 31, I don't even have a car because I just don't feel
the need. Life,age and experience changes perspectives so much. Having said
this, I love BMWs but not buying one anytime soon.

------
malandrew
This paragraph in the article seems off:

    
    
       Education is the “obvious outlet for the money Millennials can spend,” Perry Wong, 
       the director of research at the Milken Institute, told us, noting that if young 
       people invest less in physical things like houses, they’ll have more to invest 
       in themselves. “In the past, housing was the main vehicle for investment, but 
       education is also a vehicle.” In an ideas economy, up-to-date knowledge could 
       be a more nimble and valuable asset than a house.
    

I don't buy this at all. I think he may be right about Millenials investing in
themselves, but I think he's wrong about it being money. Millenials are
generally internet natives. They don't need to spend money on self
improvement, just time, because so many educational resources are free and
readily available on the internet and the quality of those resources is only
improving with time.

------
shalmanese
Living in the Mission, Zipcar hasn't cut it for me but Lyft has changed my
world! I initially was stoked by Zipcar but there's virtually nowhere in SF
you want to go to where parking is not a major issue.

With Lyft, they're brought the prices down enough so that I'm no longer
thinking "can I afford to go there", lyfts become an impulse purchase. Mission
to Soma is like, $6 - $8. Mission to Richmond is $15, Mission to Chinatown is
$12 or so. If you're going with 2 or 3 friends, then it's basically about the
same price as public transit.

Disclaimer: I'm friends with several of the Zimride staff but I'd equally be a
fan, even if I weren't.

------
logical42
Or maybe it's just the generation that realizes that the supply of oil is
finite.

~~~
hnal943
That's the reason young people aren't buying houses? Try again.

~~~
dredmorbius
If you think that the cost of oil doesn't have very direct impacts on the
value (and expense) of housing, think again.

Commute costs, viable living distance, heating and cooling bills, construction
costs, amenities (pools, landscaping, toys including boats and RVs), and
consumer goods are all directly tied to energy costs.

Housing is an expensive, illiquid, geographically fixed investment. You're
investing not only in the property and structure, but the neighborhood, local
job markets, and/or anticipated commute costs.

Oil prices have had a very direct effect on the present and future value of
suburban and exurban housing. Both positive (in the era of cheap energy, 1945
- 1974), and negative (as prices increased from the 1970 oil shocks onward).

------
padobson
I found the analysis of the importance of smartphones over vehicles to be very
interesting.

I pay $150 month for my family talk, text, and data plan, plus another $50 for
high speed internet into my house. The payment on my car is $207 a month (own,
not lease).

I probably spend another $2k-$4k a year on other piece of technology, while
doing the bare minimum to keep my car running.

And I live in the suburbs in the midwest. I bet HNers in cities have a much
stronger bias towards personal technology than personal transportation.

~~~
khuey
And how much does registration/insurance/gas for your car run per year?

------
ilamont
I wish they had sliced and diced the data more. How do these generalizations
hold up among:

\- Millennials with children

\- Millennials living in rural areas vs those in the cities

\- Millennials with college educations

\- Nonwhite Millennials

------
pjungwir
Although I'm sure most of this effect is due to the economy and student loans,
I wonder how much of it comes from people having children later and less
often. Doing without a car or home becomes trickier once you have kids. I was
disappointed the article didn't bring up children at all, because I'd be
curious to hear something on it one way or the other.

------
greedo
Amidst all the arguments about whether or not it's due to the economy, the
truth is really that all decisions like this are economically based; the real
question is whether the trends created and influenced by the economic downturn
will persist after the economy recovers.

------
nollidge
I don't think the article puts enough emphasis on gas prices driving car
sales. When I first started driving in 1999-2000, gas prices were under $2.00
USD. When I fill up at lunch today, it'll be around $3.89.

------
figital
I swear I read this article last night and it had a different title. Would be
interesting to see what the linkbait choices were.

------
indiecore
> “In the past, housing was the main vehicle for investment, but education is
> also a vehicle.”

Is this why university costs more than a house now?

