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For a while, industry experts have been more than a little concerned because they believe younger generations are less interested in purchasing new vehicles. I hate to say it, but maybe they are a bit out of touch with the current state of the economy. Maybe folks have just realized they shouldn’t be purchasing a brand-spanking-new vehicle unless they can afford it.
As it would turn out, Generation Y are purchasing a whole lot more vehicles than older Gen X’ers.
What Is Generation Y?
According to a report from J.D. Power and Associates, Millenials that were born between 1977 and 1994 bought about 26 percent of the new vehicles purchased this year. In case you weren’t aware, that portion of the Millenials is considered Generation Y. Generation X folks, who were born between 1965 and 1976, only make up about 24 percent of the yearly auto sales.
Thomas King, vice president of the Power Information Network, those responsible for collecting the report data, pretty much says this is because the Gen Y folks are growing up. “As Gen Y consumers enter new life stages, earn higher incomes and grow their families, their ability and desire to acquire new vehicles is increasing.”
While at first glance it may seem like King is onto something, the entire concept seems pretty straightforward to me. These are probably things one can glean without looking at the entirety of sales data for the year.
Why Is This Happening?
Generation Y isn’t just buying worn-out used cars. The more money they get, the more they branch out into sports cars, fancy SUVs, and even party buses like these. Custom car sales like those are on the rise as well.
Of course, neither one of those generations come close to beating out the Baby Boomers. According to the J.D. Power report, the Boomers account for 38 percent of new cars and trucks sold during just the first half of this year. In other words, the Boomers are snatching up new vehicles more than any other generation.
J.D. Power seems to believe that both younger generations, X and Y, will pick up the pace and purchase more vehicles throughout the rest of the year. It looks like we’ll find out when they release another report at the beginning of 2015.
Power also claims that Generation Y buyers seem to prefer compact autos like the Honda Fit, while Gen Xers gravitate more towards small SUVs like the Buick Encore. Could this be because they are smart enough to realize those vehicles are more wallet-friendly when it comes to mileage and gas expenses? Absolutely not, no consumers are smart enough to do something like that, right?
What we really want to know is why Generation Z was completely omitted. I guess the youngest generation didn’t buy many vehicles this year. Probably because they’re too busy focusing on school? I might have to see a bit more sales data to understand that one.