Fewer Young Americans Are Interested in Owning a Car

Owning a car may have been a traditional coming-of-age milestone for some generations, but that’s changing, as increasingly fewer young people are buying cars, or even learning to drive.

Careening Costs

In the early 1980s, nearly 90% of Americans under 20 had a driver’s license. As of 2022, that percentage was closer to just two-thirds, per Federal Highway Administration data cited in a Wall Street Journal report.

Moreover, Gen Z’s share of new and used car purchases fell 0.1% between 2022 and 2024, according to J.D. Power data referred to in the report. That might sound small, but historically speaking, it’s a big step back. Previous generations’ shares of car purchases increased by 1% each year, when they were in the age range Gen Z encompasses today.

All this is likely due to the rising cost of car ownership. The average price of a used car has risen from less than $22,000 in 2020 to more than $27,000 in 2024, a nearly 25% increase in just four years, per data from CarGurus.com. Beyond the vehicle’s price tag, insurance and maintenance costs have risen overall in recent years, and premiums are typically higher for younger drivers too.

The Impact on the Car Market

These rising costs may be pushing teens and young adults toward alternative transport options like biking, public transportation, rideshare services, or even catching a ride with their parents.

Spending trends of younger generations are often under a microscope as companies are trying to forecast how consumer spending may evolve as these generations grow older. In this situation, a long-term reduction of demand for new and used cars has the potential to reshape the automotive industry over time.

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