A recent survey by Autolist of more than 9000 people finds there may be storm clouds ahead for new car sales in the US. The survey shows that a higher percentage of likely car buyers intend to buy used rather then new. Overall, 38% said their next car would be used. 34% said they intended to buy new. 27% were undecided.
When the responses were broken down by age, the differences became much more stark. Among people under 40, nearly 54% said used is the way they planned to go when they bought their next car. Only 46% said a new car purchase was on their horizon. For those over 40, the percentages are about equal.
Not only are younger drivers less likely to buy a new car, they report they plan to keep that car for less than 5 years. 60% of centennials and 46% of millenials said they would keep their next car less than 5 years. For older Americans, the percentage who say they will keep their next car for less than 5 years is around 40%.
Centennials are defined as between the ages of 16 and 24; millennials between 25 and 39, Generation X as between 40 and 54, baby boomers as 55 to 69, and traditionalists as over 70.
For those who say they plan to keep a car for less than 5 years and then buy a new car, Cadillac (77%) and Audi (75%) were the brands those people said they were most likely to buy. For those who responded that they intend to keep their car for more than 5 years and then buy new, the winner was Subaru with 73% of the responses.
The implications for automakers are clear. Younger people are less interested in buying a new car than older Americans. There could be a lot of reasons for that. Younger buyers have less money and little credit history to secure a car loan. But they also are more likely to see themselves participating in ride hailing or ride sharing services, particularly in urban areas where owning a car can be a hassle.
Autolist warns that new car sales may have seen their last great peak in the US and that car companies need to get used to selling fewer new cars every year. That lesson has not been lost on manufacturers, many of whom are deeply committed to transitioning at least part of their future business to online income stream models.