Will Millennials Replace Their Old Car with a New One?

When millennials decide to sell their car or terminate their lease, almost all of them (94%) expect to replace it, a percentage that was largely constant across the four regions in the survey. This percentage reflects the 57% of those surveyed who believe they are very likely or somewhat likely to sell or terminate the lease in the next three years. Results were similar on a regional basis, except for the U.S. and Canada, where only 43% of respondents answered the question that way. Additionally, 24% of respondents in the U.S. and Canada believe it is very unlikely they will sell or terminate their leases in the next three years (compared to 5%, 8% and 9% in Latin America, Europe and Asia, respectively). This prompts the question as to whether millennials in the U.S. and Canada have recently acquired a car and expect to keep it longer than three years, are concerned about the economic environment over the next three years, or some combination of the two.

On the other end of the spectrum, in India and Argentina, at 80% and 74% of respondents, respectively, believe they are very likely or somewhat likely to sell their car or terminate the lease in the next three years. These survey results are not surprising in Argentina, where the average age of a vehicle is 17 years,¹¹ compared to approximately 12 years in the U.S. But the results in India are a bit surprising given recent reports of economic uncertainty¹² in the country.

Globally, the top four reasons for selling or terminating leases in the next three years are shown below.

Top Reasons Why Global Millennials Will Sell or Terminate the Lease on Their Car in the Next Three Years

The top two reasons are no surprise, especially as more and more millennials start families.

The top reasons why global respondents said they will not buy or lease another car are in the chart below. With “too expensive” as the most common choice across all regions, respondents are displaying concerns about affordability, as their reasoning for selling their car or terminating a lease. Their rationale could be due to millennials’ cost-sensitive nature or near-term concerns about the economy.

 Top Reasons Why Global Millennails Won't Buy or Lease Another Car

Sources
¹¹ Kirstin Linnenkoper, “Car recyclers in Argentina battle bureaucracy,” Recycling International, accessed September 25, 2019, https://recyclinginternational.com/business/car-recycling-argentina/19303/.
¹² Praveen Chakravarty, “Viewpoint: How serious is India's economic slowdown?,” BBC News, accessed September 25, 2019, https://www.bbc.com/news/world-asia-india-49470466.