Auto Service World
News   March 26, 2024   by Adam Malik

Inflation’s impact on vehicle ownership

Canadian millennials are being driven away from car ownership due to high costs

Canadian millennials are increasingly being priced out of car ownership due to inflation, a recent study has revealed.

Those being hit hardest are between the ages of 25 and 34, according to the Car Ownership Index from Turo, a peer-to-peer car-sharing marketplace. It found that 56 per cent of young millennials are less inclined to purchase or lease vehicles this year — compared to 46 per cent across all age groups.

Last year, the percentage of Canadians reconsidering car ownership was lower with 39 per cent showing a level of financial caution related to vehicle ownership. The findings indicate a shift in Canadians’ approach to car ownership, exacerbated by financial concerns that have escalated over the past year.

The index pointed to a growing trend of economic conditions affecting Canadians’ decisions on car ownership. Nearly two out of every five (37 per cent) respondents without a vehicle stated that high costs are the primary deterrent — an increase from 32 per cent the previous year.

The index shed further light on the struggles young millennials face in maintaining or acquiring a vehicle. Almost one in five (17 per cent) of young millennials plan to forego owning or leasing a car in the future, compared to 12 per cent across all demographics. Among those young millennials aiming to cease owning or leasing, more than half (52 per cent) cited financial difficulties as the main reason, surpassing the 42 per cent average across other age groups. The study also reported that the annual estimated cost of car ownership for young millennials stands at $6,176, above the $5,025 average for all ages.

Despite these challenges, the necessity of having a car remains high, with 85 per cent of Canadian respondents currently owning or leasing one. Even though these vehicles remain unused 95 per cent of the time, three-quarters (78 per cent) of car owners claim that living without a vehicle would be unfeasible, and 57 per cent of working individuals said they would need to change jobs if they lacked access to personal transportation.

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