Difference of a Decade: Owning Your First CarLast Updated October 4, 2016
The picture of American youth has evolved a great deal in the last 25 years. The millennial generation might not be as enamored with the automobile as their parents were, but a driver’s license remains one of the first rites of passage many American teens will encounter.
But getting a license and getting a car are not the same thing. For parents who scraped and suffered to purchase a first car, the decision becomes whether to help their new driver buy a ride, or let them pony up the dough themselves. With the average price of a used car more than double what it was just 10 years ago, teens are getting more help from the Bank of Mom & Dad than ever before.
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That’s right, America: in the home of the car for everyman, everyman is assumed to have a college degree and a steady job. Compared to their parents, today’s youth are more than twice as likely to receive at least some financial assistance when purchasing a first car.
Not only are teens getting more cash from mom and dad, but they’re also getting nicer cars altogether. Ten short years ago, in 2006, you might see students leaving their 20-year-old Buick on the way to Homeroom. These days, the majority of cars in school lots average half that age.
Are parents enjoying a sudden bout of affluence in the recovery from the 2008 downturn? Not exactly. Yes, minimum wage is up by slightly more than $2 since 2006, which means a teen working to save for a car has more money to put towards it by, on average, about two grand, but that number is quickly offset by a staggering increase in the average cost of a used car.
Where the average set of used wheels went for $8,000 in 2006, that number has more than doubled in the past 10 years. This could be the legacy of government efforts to remove older cars from the road with programs like Cash for Klunkers. Any way you slice it, it doesn’t make things easy for a teen making $7.25 an hour to buy a car.
It’s not just the financial situation of young people that’s contributing to their sweet car collection, though. Safety and a change in societal norms are also contributors.
Many parents gift their children money to purchase a more modern car because of the improved technology on more modern cars. Fuel economy has improved greatly in the last ten years, and more cars come with the important safety features Mom and Dad think about.
Who knows? Maybe if airbags and electronic stability control were around in 1971, more than 14% of children would have driven nicer, newer cars to high school. As it stands, we’re only helping the parental units feel even better about having driven a hand-me-down Pontiac Tempest to prom. The fact is, parents who can afford it feel very real pressure to get their children a safe car.
The End of the Beater Era
Seeing the American ideal of the self-bought first car fizzle out might seem sad. It is by no means completely dead, though — in fact, 60% of teens still have to meet the challenge of making their first car purchase from their own pocket.
Given the choice, would today’s youth roll in the awesomely clapped-out rides many of their parents did to save some serious coin? It’s likely many would, and they simply don’t have the option.
Don’t forget: every single teen in that situation ditched their first car and ran to the next best thing as soon as possible. It’s likely the trend we’re seeing now will allow this generation to hold on to their first ride a tad longer and enjoy it that much more.
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