Auto Trader Group plc
Auto Trader Group plc
07/12/2024 | Press release | Archived content
Car ownership becoming even more vital for young people, but getting behind the wheel is more challenging than ever
CAR OWNERSHIP BECOMING EVEN MORE VITAL FOR YOUNG PEOPLE, BUT GETTING BEHIND THE WHEEL IS MORE CHALLENGING THAN EVER
• Despite industry concerns, owning a car remains important to most (90%) 17-24s; more than two thirds intend to use their car more or the same as last year.
• Young people face barriers to entry in wake of rising used car costs, driving test back logs, and increased insurance premiums.
• Industry can make getting behind the wheel of their first car easier by making the car buying journey more transparent, flexible and convenient.
Contrary to speculation, the latest consumer analysis from Auto Trader reveals that car ownership not only remains vital to young people, but the need to own a car among 17-24-year-olds is increasing. However, from a backlog in driving tests to the rising cost of motoring, young people face significant barriers to ownership, making the need for a more transparent, connected and convenient car buying experience more important than ever to help young drivers get behind the wheel of their first car.
In a study of over 2,000 17-24-year-olds , 90% said car ownership was important to them, citing the need to 'get around' (70%) and the independence (67%) it gave them as their primary reason for wanting a car. However, this age group isn't motivated just for practical reasons; the UK has always been a nation of car lovers, and the younger generation is no exception, with over half (54%) wanting their own set of wheels for the pure enjoyment of driving.
The UK's unreliable public transport network was also highlighted as a major factor. Of the 50% who cited it as a major reason why car ownership is important to them, 80%5 pointed specifically to the ongoing train strikes.
Reassuringly for the automotive industry, the need for ownership shows no sign of waning among this age group. In fact, 70% of the 17-24-year-olds surveyed said that having their own car has become even more important over the last 12 months, which is more than double the percentage of drivers aged over 45 (31%) who felt the same. Young people also believe they're driving more, with nearly four times the proportion of young people (43%) claiming to use their car more today than they did a year ago compared to their older counterparts (12%).
Mounting barriers for young drivers.
Whilst demand remains exceptionally strong among young people, they're facing growing challenges to getting behind the wheel. Indeed, according to the DVLA , the already lengthy backlog for driving tests is only set to grow, with current forecasts suggesting that by the end of 2025, the gap between demand for tests and the number available will be over 1,100,000.
Even once they've passed their test, however, many face being priced out of the market, with data from Auto Trader revealing a dearth of affordable cars. This is largely due to the shortfall in new car production during COVID, which continues to flow through the retail market, placing significant pressure on stock levels. In fact, whilst most (58%) of the 17-24s surveyed who had already bought a car had paid less than £11,000, the volume of stock on Auto Trader in this price bracket has fallen by almost half (46%) since January 2016. During the same time frame, stock levels on Auto Trader in the under £5,000 price bracket have dropped by three quarters (75%).
The affordability issue has been further compounded by rising insurance costs, which have accelerated at twice the rate for younger people than the average driver . 18-year-olds have seen their premiums increase 84% over the last 12 months, whilst the average 17-year-old has faced a hike of 98%.
Removing existing barriers.
Whilst these obstacles are likely to remain for the foreseeable future, there's an opportunity for the industry to assist them into car ownership by removing traditional obstacles that disproportionately affect younger buyers. This includes improving transparency around finance. In a separate piece of research conducted by Auto Trader , over a third of younger consumers who bought with cash did so because they weren't aware of any finance options available, while nearly two in five didn't understand the finance options (four times as many as drivers over 55), and half thought it would take longer to get the car if they chose finance.
Enabling young people to buy their first car in a more convenient and flexible way will also help. Auto Trader's research shows younger drivers want to complete more of the car buying journey digitally; over half (53%) have checked if a car advertised online is available versus a fifth of over 65-year-olds, whilst 42% want to complete tasks online, such as paying a deposit to reserve a car versus 26% of older drivers.
There's been some recent suggestion that young people aren't interested in having their own car anymore, but that simply isn't the case. The desire for the independence and freedom that a car offers is as strong, if not stronger, for young people today than it has been for decades. But what has changed is how difficult it is to get behind the wheel of their first car, which we as an industry need to respond to. Unless we make the car buying process more transparent, more convenient and more sensitive to the barriers young people currently face, an important and growing audience will struggle to enter the market.
- Auto Trader Car Buyers Trackers 2022 and 2023, n=2079
- DVLA Forecasts 2024-2025
- Confused.com
- Auto Trader Monthly Payments Research July 2023
- (Check if/when the car is available: 17-24 53% 65+ 21%) (Get a price guide for the value of your existing car: 17-24 41%, 65+ 26%) (Pay deposit to reserve the car, 17-24 42%, 65+ 26%) Auto Trader Car Buyers Tracker: 2022-2023
About Auto Trader
Auto Trader Group plc is the UK's largest automotive platform. It listed on the London Stock Exchange in March 2015 and is a member of the FTSE 100 Index.
Auto Trader's purpose is Driving Change Together. Responsibly. Auto Trader is committed to creating a diverse and inclusive culture, it aims to build stronger partnerships with its customers and use its voice and influence to drive more environmentally friendly vehicle choices.
With the largest number of car buyers and the largest choice of trusted stock, Auto Trader's platform sits at the heart of the UK car buying process. That platform is built on an industry-leading technology and data platform, which is increasingly used across the automotive industry. Auto Trader is continuing to bring more of the car buying journey online, creating an improved buying experience, whilst enabling all its retailer partners to sell vehicles online.
Auto Trader publishes a monthly used car Retail Price Index which is based on pricing analysis of circa 800,000 unique vehicles. The same data that powers the Index is used by the Office for National Statistics to make the UK's official measures of inflation more robust, as well as the Bank of England to feed the broader UK economic indicators.
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