Richard Fry summarizes a new report:
…Debt reduction among young adults during bad economic times has been driven mainly by the shrinking share who own homes and cars, but it also reflects a significant decline in the share who are carrying credit card debt, from 48% in 2007 to 39% in 2010.
On the other side of the ledger, many more younger households were carrying student loan debt after the recession than before: 40% had such debt in 2010, up from 34% in 2007 and 26% in 2001.
Categories: Marriage and Money
The one indicator that I was surprised with was the drop in vehicle ownership/leasing … also, the statement”
I have noticed that some of the younger persons that I know, don’t seem as interested in getting a Drivers License as early as possible. Getting a Drivers License was a big ‘coming of age’ status symbol when I was a kid. Why is the young adult population (35 is young ??) preferring not to drive?
How are these folks getting to work if they live outside a city with mass transit? Are they, indeed, working?
There are a number of things going on here. Many states have more restrictive driver’s licenses for teenagers, with more hours required behind the wheel before getting a driver’s license (from a learner’s permit). Even after that, there are many states (like Illinois) that have what amount to provisional driver’s licenses—-the license comes with an automatic curfew for driving for those under eighteen. Gasoline and insurance are a lot more expensive relative to the type of jobs teenagers can get, and parents are already pressed with bills, so car ownership is no longer common for teens.
Then, for those going off to college, car ownership is irrelevant—most campuses don’t allow freshman and sophomores to park on campus; some restrict parking to seniors only (to accommodate faculty and staff parking). Those going off to the military are similarly situated; more often than not they wait until their tour of duty is over before bothering with a car.
It’s interesting you bring up employment; more young people have to relocate in order to find it. Young people who stay in places without mass transit aren’t unemployed because they don’t have a car, they’re unemployed because the jobs left. I live in a city that has mass transit, but it’s pretty time consuming—most routes don’t run very often, and we only got evening service recently. Mostly, we got the evening service because businesses were demanding it—most of the service employment is on the wealthier side of town, where the service workers can’t afford to live. Businesses were having a hard time getting or keeping employees because of the transportation problem.
In short, it’s not so much a “preference” to not drive, but a bottom-line decision—-do I need to drive. People in small towns need to drive, because otherwise they have no access to jobs (they drive to a nearby—or not so nearby—city). But urban young people are mostly leaving, not staying. Also: Zipcars and such are getting popular in larger cities, and that’s kind of the best-of-both-worlds (having a car when you need one, but not having the hassle and added expense of one in the day-to-day, when public transit is one’s best option).
Well, perhaps carrying student loan debt means you can’t buy a house or car.
@ La Lubu:
Thanks for the response. I totally forgot about the change in getting an initial Drivers License for drivers under age 18. Along with what you’ve said, La Lubu, is the cost for attaining a license. If I’m not mistaken, Drivers Ed courses cost money: public or private.
I suspect there’s class differences here, also. My nieces have their own cars, because their parents bought it for them. So, vehicle ownership is tracking parallel to marriage, in some respects.
You’re right Teresa, vehicle ownership is very much a class matter. It’s also important to recognize the change in how vehicles are made. The cars of the sixties and seventies were much easier for novices to work on; teens or their parents could get an old beater and fix it up. There are far more limitations on that now; the upside is that non-lemons are likely to last much longer, but the downside is that used cars that are driveable cost more and repairs are more expensive.