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Will U.S. Permanently Own Fewer Cars, Drive Less? Could Be

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There's good news and bad news for the auto industry. The good news is that car companies are leaner and meaner than they once were, and auto sales are slowly rebounding. The bad news? Fewer people want cars.

According to Citigroup analyst Itay Michaeli, Americans own fewer cars and trucks than they did just a couple of years ago. In all, the U.S. has seen a net loss of 2,000,000 vehicles since 2008. 

Where did all those vehicles go? Cash-for-Clunkers took slightly more than 690,000 off the road, but the rest have likely been destroyed in accidents or simply retired. And even though consumer spending is up, shoppers aren't rushing back into showrooms. They're making do with the cars they have.

Perhaps the slow sales are just a product of the shaky economy, meaning that customers should return as the economy smooths out. But Michaeli's statistics might also be attributable to something we've mentioned before: younger shoppers simply aren't as interested in cars as their parents are. Combine that consumer unease and Gen Y disinterest with the fact more people are living in cities and have access to public transportation, and you've got a long-term recipe for declining auto demand.

But car fans needn't panic just yet. These grim predictions don't mean that everyone's suddenly ditching cars and hopping into EN-Vs. U.S. automakers will continue selling vehicles, but they may not sell them in the volume they once did. Instead of moving 15,000,000 vehicles a year  -- which many consider the magic number for prosperity -- automakers may sell 12,000,000 or 13,000,000. That's enough to survive, though not thrive.

What's the solution? Michaeli suggests that automakers follow Hyundai's example and offer job-assurance programs. Hyundai Assurance was hugely successful and may explain why the automaker has been doing so well in the U.S. in recent years. According to Michaeli, programs like Assurance don't cost dealers anything upfront, like an incentive would, and if Hyundai's record is anything to go on, the number of actual returns will be underwhelming.

We'd like to know your plans, though. Do you intend to buy a new car soon? Or will it be used? Or will you stick with the one you've got? Or are you hoping to bite the bullet and go completely car free? Drop us a line, or post a comment below.

 
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Comments (6)
  1. Just bought a new car, but traded in two to get it.
    It is worth noting that I would not have bought the new car if I was not such an enthusiast because we did not need it.
     
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  2. Automobiles can be just as addictive as drugs, alcohol, food and women ;-)
     
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  3. There are no practical alternatives to motor vehicles for most of us. However, it will be a while before a family can justify having more than one vehicle per adult driver. The word MPV Multipurpose Passenger Vehicle was coined dduring the Jimmie Carter recession for a similar reason. Minivans were born to satisfy that need.
     
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  4. Holding on to our 2006 Nissan Frontier and 2004 Honda Accord because cars are getting too expensive to own in every aspect.
    If one were too step back an look at what it cost to own and maintain an automobile it would make your 401k shine even in today's market!
     
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  5. I used to be a car nut,I couldn't wait to lease a new vehicle.
    I always hoped they would have one year leases available.
    Car manufacturers offer 72 month financing on vehicles with 36 month warranties. Ford Explorers can hit the mid $50,000 range when loaded up, Volkswagen tourag can hit $60,000.
    even a loaded Tiguan can hit almost $40,000.
    We were able to drop to a one vehicle family. I think America's love affair with the automobile is definitely losing much of its luster.
     
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  6. There is not many cars out there at a resonable price to be enthused about. Maufacturers are just out to make money and they wont put anymore into a vehicle than they have to, to make it sell.
     
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