The SEMA Show, the automotive industry tradeshow is next week in Las Vegas, where more than 100,000 industry leaders from 100 countries will get together to talk about the future of automotive. So I thought I’d take a closer look at the newest research into Millennials and cars.

We’ve all heard the reports: Millennials don’t buy cars, they don’t have driver’s licenses, and for what little commuting they need to do, they’re covered with their Ubers, Zipcars, bikes, skateboards, and of course: self balancing electric unicycles. The theory went that young adults today simply didn’t need to buy a car, they all moved to the city and they preferred a simpler, urban life, with short distances between work and home and an emissions-free conscience.

But recent reports are painting a very different picture. What was a wide, generational brush into the psychographic qualities and preferences of an entire generation, may have simply been a big life stage misunderstanding. As new reports emerge about twenty-somethings-now-turning-thirty-somethings, we’re discovering that perhaps the automotive category should not be so quickly dismissed for this group than previously suggested. In fact, this generation might prove to be the savior of the auto industry within a few short years. As it turns out, you get older, your career takes off, you start a family and you question your 400 square foot living conditions. Sadly, the self balancing electric unicycle just doesn’t cut it forever.

Here are the four surprising things we’ve learned about Millennials and cars that every marketer needs to know:

In past generations, luxury car brands were set aside for 40-ish year old executives, dads in mid-life crises, and double-income-no-kids professionals. But as Boomers and Generation X adults showed a preference for German imports and luxury styling in their vehicles, and new entries in the luxury category hit the market with lower price points in order to widen the reach of these brands, the luxury car has become the aspiration for a new generation of young car buyers. The Audi A3, BMW 2 and 3 Series, Mercedes CLA250, and the Lexus CT 200h and IS 250, are all smaller, luxury vehicles around the $30K mark. And as Millennials secure employment, currently now at 76.8 percent, the highest level since November 2008, wages — and disposable income with it — are starting to finally pick up as the impact of the economic slowdown begins to wane. As “Millennials redefine luxury” (CNBC, Feb 2015) in many categories — from fashion to technology to food and travel — they are more willing to both experiment with brands while also expecting luxury brands to become more accessible to them on price point, ecommerce, and deals in almost every category.

When you grow up as the generation who invented social media (remember Friendster!), who adopted new forms of technology like text messaging, and who now leads the market in mobile computing, you might have some pre-conceived notions about what a car is intended to do. Millennials don’t understand why a car can’t seamlessly connect to their cell phones, provide ample USB charging outlets, let them listen to their own playlists on Spotify, and provide a sizable screen for navigation and user interface. Oh, and a WiFi hot spot. Although car makers have always competed in the technology arms-race, it’s these new features that have young adults interested in new cars more so now than in the last decade. And it’s for this reason that, despite how budget conscious they may be, used cars simply don’t cut it. A late 2010s model is just too pre-mobile and simply isn’t as smartphone-enabled a car as the current crop. This generation lives in a world where their phone OS updates every month, where they try a new mobile game or social platform daily, and “disposable tech” has become a common discussion topic.

In 2015, 28.9% of new car purchases by Millennials were leased compared to 26.7% of the general population. That stat might not seem significant in and of itself, but when you look at the other trends that are happening along with it — leasing increased 46% amongst Millennials, only 8% of car purchases are in cash with this group, 37% of 18–25 year olds say they would rather lease — we see a story of a generation that views owning things differently, and leasing fits those views perfectly. Edmunds found that Millennials are 30% more likely to lease a Ram truck than the general population. It’s been described as the ‘sharing economy’, as Millennials are renting out their homes on Airbnb, using Zipcar or Uber when they do need auto transportation, or sharing a bike like Divvy in Chicago or Citi Bike in NYC. The sharing economy may be one of the reasons that Millennials are waiting until they’re older to drive, they simply have so many transportation options available to them at a significant easy point-of-entry (not to mention places they can still use their smartphone while commuting). In 1975 14% of all licensed drivers were aged 20–24, and today that number has dropped almost in half to only 8% of drivers. Only 50% of Millennials are licensed by age 18. But if anything, this sharing economy has taught Millennials some very different values around owning stuff compared to the generations before them, and combined with their knowledge that technology is a disruptive tool for finding new ways to hack traditional business models, it’s no surprise that car leasing and new ways to lease — like using apps, transparent pricing, and lease brokers — is the new world order for Millennial car buyers.

Certainly Millennials were the generation that were driving less than older generations. But as Millennials get older — with many of them now in the 29–34 year old demographic — new neighborhoods, families and work commutes are driving them into dealerships as the next big auto category consumer. Millennials made up 27% of new car sales in the US in 2014, which was up from 18% just a few short years earlier. This is staggering growth from a segment where 73% say they intend to purchase a car within the next year! For automakers, this is music to their ears. Although Boomers remain the single-largest auto demographic, Generation X was simply too small a group. As Boomers reach retirement age and car buying slows to a stall, Millennials are the most important group for auto brands — and they’re driving the product in the category from aspects of design to technology to type of vehicles. Top brands range from small car luxury from Lexus, Acura and Jaguar to compacts from Subaru, Scion and Mini through to large trucks from Ram and GMC. As Apple sets its sight on auto technology, and Millennials begin to drive the product decisions in the space, “manufacturers are finally realizing that their vehicles aren’t just tools of transport, they’re smartphones on wheels.” (Fortune, July 2015)

A new era of the automotive is here, and surprisingly, we have those “Millennials who don’t drive” to thank for it.

Jeff Roach is the Chief Strategy Officer & Executive Creative Director of digital youth engagement agency, Fuel. Jeff helps brands around the world create meaningful digital experiences with global youth audiences. fuelyouth.comTwitter: @silverstarme Instagram: @Silverstarme

Infographic below, and available at:

Also published on Medium.