So, we’ve talked about driverless cars. We’ve said that the auto manufacturers are latching on to this concept- and to ride sharing (especially with driverless vehicles). Because they recognize that their business model needs to be updated.

The manufacturers are scared stiff that their autos are losing their control of the psyche of the American citizen- as well as the rest of the world’s minds.

After all, we know that millennials are not buying cars- and seniors are turning in their cars in record numbers. No more is the granting of a driver’s license at 16 or 17 the cultural icon it was when I was a boy. From 2009 to 2014, the number of licensed young drivers had evaporated by 37%- with the roster just over 1 million… the same tally it was in the 1960s.

From the time my middle daughter was born (1983) until 2010, license holders at sweet sixteen dropped from 46% of the total down to 28%; it also dropped for those 17 years of age from 69% to 46%.

Many of us wrote this off to a change in lifestyle, to the choice of Uber or Lyft for transportation. Or, even that the internet has replaced the auto as the social instrument of choice. But, those guesses are way off base.

C. Kurz, G. Li, and D. Vine of the Federal Reserve completed a study on car purchases. The Young and the Carless? The Demographics of New Vehicle Purchases. Their data suggests that young folks are unable to purchase a new car- whether that’s because the debt is too high to bear or the operating expenses of car ownership are too high. (You do recall I reported that the auto manufacturers recognize that, outside of home purchases, a car purchase is the biggest expense a family makes. And, the car itself is used less than 1% of the hours in the day. Which makes its hourly costs truly excessive.)

Since the Great Recession ended, less than 20% (19.8%) of the younger folks (aged 16 to 34) have bought a vehicle- which is down by a third (when it was 28.6%) from the 2010 statistics. And, even as the economy has sputtered upward, only 22.6% of that census have purchased cars.

But, it’s not just young folks. Those between the ages of 35 and 39 have also cut their vehicle purchases by a 1/4 (39.2% down to 29.9%). Only the senior set has been increasing car purchases.

But, more importantly, when Kurz et. al. adjusted the buying behavior for income, employment status, and a few other demographic factors (marriage, children, education), they found these same drops in car purchases across the board- regardless of the age group. And, that holds true even though we are still driving and driving (annual mileage has increased from 7700 in 1960 to 14100 in 2014).

Looks like the car companies better fix that model soon!

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