“A recent drop in teen driving likely comes down to simple economics,” says a new report from the Highway Loss Data Institute. “Young people today may want to drive just as much as they did a generation ago, but simply can’t afford it.”
Many media reports suggested that it is social media, smartphones, and the internet that keeps young people from driving. Wrong: Young people turn to Facebook or Twitter to interact with friends, because meeting them in person is getting too expensive.
The study shows that the decline in teen driving coincided with the economic slowdown, and the shortage of work has disproportionately affected teenage job seekers.
“It looks like teens just can’t afford to drive,” says HLDI Vice President Matt Moore. “Paying for their own cars, gas and insurance is hard if they can’t find a job. At the same time, kids who count on Mom and Dad to help them also may be out of luck if their parents have been affected by the recession.”
To make matters worse, the average cost to drive 10,000 miles in a year jumped from 62 cents a mile in 2006 to 77 cents last year, the AAA says. The prices of used cars, the vehicle of choice of most young people, reached record highs in 2012. Jonathan Banks, Executive Automotive Analyst of NADA Used Car Guide, expects used vehicle prices to finish the year 0.5% to 1% higher than 2012’s record level.
As written by Ed Niedermeyer just a few days ago, if the industry wants to rekindle teen interest in cars, then in must make cars, and the driving of cars, affordable. Several OEMs are working on low cost cars that could sell for around $5,000 new when they come on the market in a few years. As a project spearheaded by former Dacia chief Gerard Detourbet, Datsun will launch a low cost car in India in 2015. “It won’t be a car on a 25 year old platform that was amortized several times already,” Carlos Ghosn said a few months ago in Chennai, India. “It will be totally modern, totally new.” Currently, that car is targeted at the emerging markets, but as Detourbet told me in India, it might very well appeal to young drivers in developed markets who search for affordable transportation, and who increasingly shun fancy brands. H&M, Uniqlo and Zara have shown the way.