Generation Y: Why are you not on the road?

It may have once been the case that purchasing a car was considered a sign of joining the adult world, but now, why are the rates of young drivers on the road decreasing?

The automotive industry has seen a shift in consumer demand -- young people are simply not buying cars in the way they used to.

According to the NY Times, in 1998, 64.4 percent of potential drivers (up to 19 years old) had a driver's license, whereas in 2008, 46.3 percent possessed the legal ability to drive. This percentage has decreased steadily, and the current economic climate is a likely deterrent to the next generation of consumers considering a vehicle on their priority lists.

The Atlantic reports that Toyota USA President Jim Lentz commented on this issue, and how the industry has been forced to adapt:

"We have to face the growing reality that today young people don't seem to be as interested in cars as previous generations. Many young people care more about buying the latest smart phone or gaming console than getting their driver's license."

46 percent of millennial drivers, 18 to 24, said that Internet access was more important than owning a car in research conducted by Gartner. A tenuous link has been placed between Gen-Y preferring technology over owning a vehicle, as the industry also considers it 'disinterest' rather than any other factor, but is this truly the case?

It is not about choosing between the latest smartphone and owning a car -- if I had the option, I'd happily have both. However, it is about long-term costs, a volatile job market, and the general poor state of economics that is to blame. Whereas a smartphone may cost $400 as a singular purchase, a car may cost you that amount a month, or more, simply to run.

In the U.S., passing your driving test and owning a car used to be a ritual event -- one more step into the world of adulthood. Owning a car is often considered a necessity due to city infrastructures that are built on the assumption that individuals have access to private vehicles -- and so learning how to drive was tantamount to 'joining' society fully.

However, this infrastructure has not adapted to the shift in cultural expectations due to an economy which is far less stable than a decade ago.

In the UK, multiple car ownership was commonplace thirty years ago, however the high expense of using a personal vehicle has resulted in a shift of attitudes -- it is now a luxury to own a car, rather than an expectation.

Culture changes. It adapts, shifts and transforms depending on the present situation, economy, population and political landscape. Gen-Y may be notorious for dodging events that were once seen as rites of passage, but it is not necessarily that they want to -- it is that they have had to adapt to a different climate, and alter their expectations accordingly.

The recession and subsequent aftershocks caused rapid changes in consumer demand, as well as lowering the amount of disposable income that could be filtered back in to the economy. Those in the middle and working classes that shopped for luxury brands had to tighten their belts; the parents that considered buying their teenage daughter a car for her birthday had to rethink their plans -- and perhaps settled for a smartphone instead.

We can't blame interest in technology for the shift in young consumer demand and interest. It is high living costs and financial feasibility that makes finding cheaper alternatives necessary.

In the U.S., the expense of running multiple cars is not necessarily a burden that many can shoulder anymore. The price of gas ranges from $3.86 to over $4 a gallon across different states, when in the late 1990's it was less than a dollar in many areas. In the UK, a gallon is approximately $11 -- with slightly higher rates in major cities such as London.

One of the main reasons that the British younger generation do not drive so frequently is the costs associated with both learning and running a vehicle. Once you have paid for lessons (an average learner may take up to 25 one-hour lessons at £25 ($40) per hour, the test must be paid for, which is split into theory and practical assignments. The collective cost of the test is approximately £330 ($526).

If you fail, which is often the case due to stringent requirements, the process begins again.

If you pass, then a car can be purchased relatively cheaply, from several hundred to a thousand pounds. However, the next obstacle is gaining insurance -- which could be the retarding weight in terms of deciding to purchase a vehicle.

Insurance is extremely expensive in the UK. For an average 18 year-old, insurance for a bog-standard car is around £2000 ($3189), to £2500 ($3986) for models with larger engines.

Due to the spiraling costs, many UK parents exploited a loophole in order to get their teens on the road -- by purchasing them a car but buying insurance with the parent as the main designated driver, and the child a 'named' driver (a secondary, 'drives on occasion' type of insurance).

By doing this, the cost of insurance became more manageable for a while -- and parents still sometimes take this route. It is still legally possible to do so. However, insurance companies began to recognize this trend ten years ago, and now if a parent is caught out, the insurance is null and void -- and prosecution for not possessing insurance is a real possibility.

If there is an accident, the parent will be liable for insuring under false pretenses, whereas the child is liable for driving the vehicle in question. Since there is no insurance, both parties will be liable for any accidents, injuries, or damage.

Therefore, this avenue has almost closed -- and fewer working or middle class families can afford the cost of personal vehicles for their children. Not only this, but many of the Gen-Y and younger are grasping for jobs, and have no means in which to fund a vehicle.

When the loophole was closed, and more young drivers were 'officially' on the books, insurance premiums rose again for that age bracket, further exasperating the problem.

In the U.S., it is also the spiraling, additional costs that accumulate through running a vehicle may also be causing the number of young drivers to drop. It isn't that teens simply enjoy hanging out online and have forgotten their social skills -- given the opportunity and freedom associated with being able to drive, most teens would enjoy owning a car.

It is simply about feasibility and being realistic about what can and what cannot be afforded.

When so many young people in the West are struggling to climb the rungs of the career ladder, or even hook on to the first step and secure a job in the first place, necessities such as paying rent have to take precedence over expenses that you could manage to do without.

The infrastructure and support of American travel may not be equipped to cope with a society that does not have access to personal vehicles. However, when economic woes cause 'the lost generation' to struggle in low-paid work, eventually the ownership of a vehicle may take on the how the UK perceives it -- as a luxury instead of a necessity.

Image credit: Jeff Turner

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This post was originally published on Smartplanet.com