Fewer young people can afford to have a car

I was reading a news opinion article titled "Young Americans Struggle to Hit Adult Milestones".

Young Americans Struggle to Hit 'Adult' Milestones Story, Bloomburg, Natasha Solo-Lyons, May 2023

It's about how certain "milestones", such as driving a car, moving out of one's parents house and renting an apartment, starting a family, or buying a home, are getting delayed among the newest generation of young people, compared with young people in previous generations (born between around 1935 to 1985).

Something I have noticed, I see a lot of teenagers these days who do not have a car.
When I grew up, it was very common for 16 year old teenagers have a car and be driving around.
These days it seems that it's too much of a financial stress for many families to buy their child a car or pay for their car insurance. And it's much harder for a 16 year old or young adult to buy a car than it used to be, more expensive.

I think this has huge implications. Having a car used to be associated with "freedom" for teenagers. In most parts of America it's very difficult and very time consuming to be able to get around and go many places without a car.
I believe this may no doubt be part of the reason that numerous surveys show the younger generation is dating less and having less sex than previous generations, despite the level of sexual permissiveness having only increased.

You can also read this article from Vox
Young people are driving less than their parents. But why?
Vox, Joseph Stromberg, May 1, 2015

The article has a graph showing that the amount of distance Americans were driving was only continuing to increase but then around 2004 to 2007 it began to decrease.

The Washington Post also had an article titled "Why aren't younger Americans driving anymore?"
Brad Plumer, April 22, 2013

Here's some excerpts from that article:

Ever since the recession hit in late 2007, Americans have been driving less and less. Was that because of the horrible economy? To some extent, perhaps. But it's striking that Americans are still cutting back on driving even though the economy is growing again. Doug Short, who charts financial data, has put together a nice graph that uses the latest Transportation Department data on vehicle-miles driven and adjusts for population growth. Looked at this way, the plunge in driving is even more startling and began back in June 2005.

This isn't the first time Americans have pared back their driving habits -- after the OPEC oil shock in the late 1970s, miles driven fell about 6 percent from the peak, though they started climbing again by the end of the recession in 1982.

This time, however, the drop has been much more severe. Since June 2005, vehicle miles driven have fallen 8.75 percent. The decline has persisted for 92 months and there's no sign it's abating.

Young Americans are driving much, much less. Between 2001 and 2009, the average yearly number of miles driven by 16- to 34-year-olds dropped a staggering 23 percent.

The Frontier Group has the most comprehensive look yet of why younger Americans are opting out of driving. Public transportation use is up 40 percent per capita in this age group since 2001. Bicycling is up 24 percent overall in that time period. And this is true even for young Americans who are financially well off.

The cost of driving has gone up. In some ways, it's become more expensive to drive a car over the years. There's evidence that high student debt is hampering some younger borrowers from buying cars. And auto-insurance rates have soared in recent years, partly as a result of higher healthcare costs. Auto-insurance rates continued to climb 10 percent between 2008 and 2010 even though average driving distances were down.

It's harder to get a license. From 1996 to 2006, every state enacted graduated driving laws that make it more cumbersome for young people to get licenses. "Young people must now take more behind-the-wheel training (which is more expensive), fulfill additional requirements for permits, and once they are allowed to drive, they are often restricted to driving in the daytime without passengers." The number of younger Americans without a driver's license has risen from 21 percent to 26 percent since 2001.
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Why aren't younger Americans driving anymore? - The Washington Post

 

Average Americans Are Struggling To Pay For Their Cars Following Delinquencies, Price Increases

Heightened rates of auto loan delinquency and increased costs reveal that Americans are struggling to afford their cars, according to The Wall Street Journal. Both prime and subprime auto loans have increased in 60-plus-day delinquencies, with prime reaching 0.49% in June compared to 0.41% a year prior and subprime reaching 5.37% compared to 4.89% during the same time frame, according to S&P Global.

Only one new car model is listed as selling for under $20,000 in 2023, as opposed to a dozen five years ago, according to the WSJ. The average costs for used cars are high, as well, with the average used vehicle listed at around $27,000, which is up 30% from pre-COVID-19 pandemic levels, according to the WSJ. The average for new car loan payments is over $750 per month with the average interest rate being 9.5%, according to the WSJ. To pay off a new car at current prices would require the average American to pay 42 weeks of their income, which is up from 33 weeks before the COVID-19 pandemic.

(article source: The Daily Caller, Will Kessler, August 2023 )

related thread: Unable to afford homes, Americans dive into subprime auto debt

 

Yup. People, mostly young, can’t afford a new car, the US credit rating has been cut, houses aren’t selling because of interest rates, rental costs are too high for young folks unless they share accommodations with “room mates”, many customers of grocery stores bag their own purchases because the stores have cut jobs and the existing ones are worked to the bone.

“But but but . . . . this is the best economy in 20 years!!!”

Yeahright

How many times have I said capitalism is in crisis? Believe it. “They” just don’t want you to know because it will get worse faster. But it will get worse anyway.

 

Insurance is ridiculous. I used to ride a bicycle everywhere and did not get my driver's license until I was 38. I'm pushing mid-40s and I have never had a ticket or any sort of driving infraction and yet my insurance for the bare minimum coverage is $100 a month.

Ironically I get full coverage on a motorcycle for about $21 a month. One would think motorcycle insurance would be significantly more than car insurance

 

I noticed that a lot of our members here that seem to be pretty well off on the left tend to criticize capitalism but it is under a capitalist system that they became pretty well off.

Then in the very next breath they turn around and like to tell us that the United States is also run by socialism....citing things like public schools and public roads and social security

 

That is unusual. Yes, there has always been a portion of people in U.S. society who did not get a driver's license, but for the most part that was unusual, especially among the white middle class, at least from the 1960s to 2005.

Probably because your insurance only covers injuries to other people, not to you. Someone on a motorcycle is statistically very unlikely to cause injury to someone else.
That and replacing a damaged motorcycle is much cheaper than a car.

 

related thread: In 4 years, home prices increased 69%, car prices 31%

 

I need to ask progressive exactly what my full coverage entails because it was sold to me as full coverage which should mean it would cover my injuries as well.

As far as bike insurance the agent told me it really depends on the sort of bike. Mine is not a terribly large engine and it's not expected to be doing stunts. But he told me a Hayabusa ( one of if not the, fastest production bikes ) would cost more to ensure than a Corvette.... Because who's going to get a bike that can go 200 miles an hour if you don't plan on occasionally doing it?

It's ridiculous what cars and home prices are now.... You would think surely the bottom must fall out of the market at some point

 

I'm just worried that the U.S. (and other developed countries) could end up like so many impoverished countries in other parts of the world. And if that happens, it will probably be a one-way phenomena.

I think we (including economic theorists) need to do a better job of understanding exactly why some countries are rich and others are poor, and not just take things for granted. Because it seems apparent the U.S. is slowly moving towards a Third World direction.
Things that used to be taken for granted in America -- like it being very common and normal for 16 or 18 year olds to drive a car -- could someday become a rarity, like it is in other countries. It's one symbol -- an indicator -- of living standards and economic prosperity.

In India, if a family is lucky enough to own a car, it's the norm for the whole family to share it. And I'm referring to a whole extended family, including grandmother, grandfather, husband's sister, often 5 or 6 family members will routinely pack into a 4-seat car to go somewhere, something that's totally normal. Obviously a young 18 year old adult is not getting their own car, let alone a teenager.

 

wages are not keeping up with inflation, and the Republican run fed is trying to stamp down rising wages

 

If we're talking about new cars, I don't think young people are sposed to be driving new cars. Used cars are still as cheap as they've ever been. Granted they're a bit more complicated to maintain, but now we have youtube tutorials that tell you how to fix literally anything, especially car problems. I don't think there's any excuse for anyone not being able to afford a car.

You might have a point with the lisencing. I dunno much about that these days. I took drivers ed in HS, got a good enough grade to skip the driving exam, and renewed my lisence since then with a new photo once or twice over the decades. But I can't imagine its really all that much more complicated now...

My guess is that more young people are intimidated by the traffic. I drive a couple times a month in dense metro areas for work, and its a huge stresser. There's way too many people getting in eachothers way in pretty much every city now. If I lived in an urban area, I wouldn't wanna drive every day either. Its torture.

 

Maybe we should get rid of the fed.

 

You find it hard to understand because, for the political right, it’s all about individuals. So you look at selected individuals that make your case.

For the left, it’s all about society and how the average or median person is doing. So we look at the numbers to make our case.

 

The median person in the US or in the world?

 

That would depend on the issue, wouldn’t it. In this case it would be the US because that is what Fatback referred to.

 

The US is not “run by socialism”.

 

So in the US, everyone's doing pretty well. No starvation, everyone has the cell phone, and the Netflix

 

Ya think?

People, mostly young, can’t afford a new car, the US credit rating has been cut, houses aren’t selling because of interest rates, rental costs are too high for young folks unless they share accommodations with “room mates”, many customers of grocery stores bag their own purchases because the stores have cut jobs and the existing ones are worked to the bone.

“But but but . . . . this is the best economy in 20 years!!!”

Yeahright

 

Well, the economy sucks because of the US gov't. But you must admit that nobody is starving.

 

No starvation? "Nearly 1 in 4 households have experienced food insecurity in 2020. Even before the pandemic hit, some 13.7 million households, or 10.5% of all U.S. households, experienced food insecurity at some point during 2019, according to data from the U.S. Department of Agriculture. That works out to more than 35 million Americans who were either unable to acquire enough food to meet their needs, or uncertain of where their next meal might come from”.

https://www.npr.org/2020/09/27/912486921/food-insecurity-in-the-u-s-by-the-numbers

https://www.feedingamerica.org/research/map-the-meal-gap/overall-executive-summary

https://www.chn.org/voices/food-ins...problem-for-the-u-s-in-2023-it-may-get-worse/

 

Rice is about $0.50 per pound. Navy beans are about a buck a pound.

 

You’re reaching. ….-WITH A STRAIGHT FACE!!!!

No starvation? "Nearly 1 in 4 households have experienced food insecurity in 2020. Even before the pandemic hit, some 13.7 million households, or 10.5% of all U.S. households, experienced food insecurity at some point during 2019, according to data from the U.S. Department of Agriculture. That works out to more than 35 million Americans who were either unable to acquire enough food to meet their needs, or uncertain of where their next meal might come from”.

https://www.npr.org/2020/09/27/912486921/food-insecurity-in-the-u-s-by-the-numbers

https://www.feedingamerica.org/research/map-the-meal-gap/overall-executive-summary

https://www.chn.org/voices/food-ins...problem-for-the-u-s-in-2023-it-may-get-worse/

 

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Absolutely absurd. The Fed is practically all Democrats, moderate progressives mostly of the neoliberal variety. Perhaps they just seem like "Republicans" to you because they are not further to the Left.
Don't bring stuff like that up in this thread, FreshAir. You have a very bad habit of making statements that are controversial and not obviously true that are likely to derail the thread topic. It's been pointed out to you before.

Wages would not have to keep up with inflation in the first place if there was no inflation. I'll leave it up to you to decide which Party is more responsible for that.

This seems like a classic case to me of stupid Left-leaning policies causing problems, and then the Left (like you) just blaming the problems on the policies not being even further to the Left.

But this thread is NOT about debating the issue of inflation, so let's just stop that.
(Yes, we agree that inflation is a major cause of car and home prices increasing)