Increasing New Car Prices Cause Drop in Sales with Younger Drivers
Thanks in part to financial struggles including but not limited to student loan debt, low wages, high rent and housing costs, crippling addictions to avocado toast, and the existence of capitalism in general, it’s proving difficult for young drivers to get behind the wheel of new cars.
According to a story in The Wall Street Journal from auto reporter Nora Naughton, J.D. Power data shows that new-vehicle purchases among buyers aged 16-35 dropped 4.5 percent in 2019. In contrast, sales among drivers 56 and older were up by 1 percent. Also up in 2019: the average price of new vehicles, which increased $1,100 to $33,600.
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The ever-decreasing presence of economical new cars like hatchbacks and compact sedans is part of the reason why those prices are up, which makes it more difficult for younger drivers to opt for the average $566 monthly payment for a new car. Because there are fewer cheap options, sales of new cars priced $20,000 or under fell 20 percent in 2019.
This trend will likely lead to 2020 becoming a record year for used car sales according to industry analysts. Per data from Cox Automotive, the average price of a used car is $150 lower than a new car. While Naughton writes that lending terms, interest rates, and incentives may provide younger drivers with some financial relief, new car prices will likely continue to rise in 2020, further shutting out avocado toast-munching snowflakes everywhere.
“We really do need the younger buyers in these new vehicles,” 2019 National Automobile Dealers Association Chairman Charlie Gilchrist told Naughton.