Is Car Ownership Declining?

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Before COVID-19 came along, there was a general belief that car ownership was declining in the U.S.
Proponents of this view said it might take a while to play out, but car ownership would drop due to the increasing affordability of rideshare services and the high cost of maintaining a vehicle.
Data appeared to support this argument. Younger millennials and Generation Z were buying cars at a much lower rate than previous generations.
A government report showed that between 2010 and 2015, the percentage of households with access to a vehicle had gone down for the first time in 50 years.
But did the death knell of car ownership ring too soon? The COVID-19 pandemic appears to have given car dealerships a big boost, and recent sales data suggests ownership is creeping up again.
A car-owner hold up her keys
Owning a car isn’t as common as it used to be.

Was car ownership declining before the pandemic?

As presented by InvestorPlace, data from the U.S. Census Bureau data showed that in 2015, for the first time since 1960, the percentage of Americans with access to a car decreased.
Commentators credited the increasing popularity of rideshare apps like Uber for the change, with younger Americans particularly averse to car ownership.
Car ownership is expensive when you factor in gas, car insurance, parking, and repairs. Why bother when an app can get you from A to B for a reasonable cost?
Many consumers just weren’t as reliant on personal automobiles anymore. Other young Americans were turning to leasing, rather than buying their cars, to save on upfront costs.

Has the pandemic boosted car ownership?

Data strongly suggests that the pandemic has boosted car ownership. While the first half of 2020 was disastrous, by the end of the year, total car and car part sales were up 10% compared to 2019, and 14% compared to 2018 (FreightWaves).
Many car dealerships reported record turnover, and while the semiconductor chip shortage has slowed production in 2021, demand is through the roof.
Even used cars are selling for a lot more than their pre-pandemic prices, with stimulus cheques adding to the disposable income of many Americans, and others just looking for avenues to spend their cash when travel is largely restricted.
Certainly COVID-19 has elevated most people’s desire for personal space, so as Americans return to the office, driving a car might feel safer than a rush hour bus or train. This concern is also boosting demand.
Rideshare will continue to be preferable to car ownership for many Americans, but even so, an increased reluctance to share rides with strangers means more drivers and cars are needed.
ValuePenguin has published updated numbers, showing the percentage of households with access to vehicles. Despite slowing slightly at the start of the last decade, car ownership had largely rebounded even before COVID-19’s impact was felt.
California has the most registered vehicles, and has seen one of the biggest increases too, going from 12,999,038 in 2012 to almost 15 million vehicles today.
The state with the largest decrease in registered vehicles is New Jersey, going from 3,931,287 down to 2,639,261 in the same period. This represents a massive 32.9% decrease.
It is true that younger demographics are driving less than previous generations, but with electric cars, and eco-friendly options increasingly available, and these cars well-designed for urban driving, automakers hope to win them over.
Overall, the number of households with access to a car is still increasing, albeit very slowly. It remains to be seen if this continues beyond the pandemic and into the new decade.

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