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Young adults shift away from car ownership

| Thursday, June 6, 2013, 10:07 a.m.
Bobby Cancilla, 21, of the North Hills, recently bought this 2013 Ford Fusion Tuesday, June 4, 2013.  Heidi Murrin  Pittsburgh Tribune-Review
Bobby Cancilla, 21, of the North Hills, recently bought this 2013 Ford Fusion Tuesday, June 4, 2013. Heidi Murrin Pittsburgh Tribune-Review

Robert Cancilla was swept off his feet in April.

He saw the 2013 Ford Fusion, and, “I fell in love with it off the bat,” the North Hills resident said.

Cancilla, 21, a rising senior at Robert Morris University, needed a new car to replace his faltering 2004 Honda Accord, which he bought used in 2010. He works part time at a car wash and has a full-time, commission-based marketing internship.

Cancilla, however, is among the minority when it comes to car ownership among young adults.

The flailing economy and the declining desire for mobility among young people who maintain contact with peers through social media is contributing to a decline in their ownership of cars and driver's licenses, auto dealers and industry experts said.

In Pennsylvania, for example, the number of residents 16 and 17 years old with driver's licenses declined 48 percent to 79,383 between 1999 and 2012, according to the Pennsylvania Department of Transportation.

In 1999, 45.6 percent of 337,193 teens ages 16 and 17 had Pennsylvania driver's licenses, compared to 29 percent of 341,211 Pennsylvania teens in that age group in 2011, the most recent population data from the Census Bureau available.

Another factor in young people's lack of wheels is student loan debt, which has passed $1 trillion and is the highest form of debt outside of the mortgage segment, said Chris Christopher, director of consumer economics at IHS Global Insight in Englewood, Colo.

Millennials' share of total new car sales fell almost 30 percent from 2007 to 2011, according to a report by Edmunds.com Inc., a Santa Monica, Calif.-based operator of a car shopping website. But that group of 18- to 34-year-olds picked up its spending in 2012, rebounding to 20 percent under 2007 sales levels. Millennials account for 12 percent of U.S. new car sales. More than 14 million new cars were sold in the U.S. last year.

Mt. Washington resident and new Carlow University graduate Heather Kaczorowski, 22, was close to buying a new car last month, but put the brakes on the purchase because she wanted to investigate insurance prices.

The decision paid off because her parents recently decided to give her their 2008 Dodge Caliber.

Spring and summer purchases for high school and college graduates is a small percent of total sales at Baierl Automotive Group, based in McCandless, said Bob Baierl, vice president.

The younger generation of potential car owners has different purchasing priorities, he said.

“The identity of that generation of that group of people has shifted” from what they drive to what they carrying in their pockets or the computers they use, Baierl said.

Baierl could take better advantage of its proximity to local colleges, including the Community College of Allegheny County, La Roche College and the University of Pittsburgh, he said.

“Are we effectively going down to campuses and putting vehicles in place? Are we targeting them on their mobile devices? I don't know if we're doing that exceptionally well for that group,” he said.

Richard Bazzy, owner of Shults Ford-Lincoln in Wexford, said that he hasn't seen a change in the buyer patterns of young customers, likely because the Wexford area is affluent.

Almost all manufacturers offer incentives for first-time buyers and new college graduates, ranging from deferred first payments to cash back to 0 percent interest for those with good credit, said John Putzier, chief executive officer of the Greater Pittsburgh Automobile Dealers Association in O'Hara.

Because credit stipulations have become stricter, many young buyers don't have the credit to qualify for these programs, he said.

Sales to new college graduates are down during the last 10 years at Mick's North Hills Chrysler Jeep Dodge in Ross, owner Mick Wolcott said.

Ten years ago, most college graduates had jobs right out of school, but the economy has changed that, he said.

The type of degrees new graduates have, however, does play a role in car purchasing.

“Right now, the big jobs are the engineering jobs because of all the fracking (for natural gas production) that's going on, and they're paying well to hire these kids,” Wolcott said.

Tyler Charlton, 18, of Oakdale graduated from high school last year and works full-time for a landscaping company. After delaying getting his driver's license until his 18th birthday, he bought a 2013 Ford F150 pickup two months ago with his mother as cosigner on a loan.

“It's awesome, a lot of freedom,” he said.

Tory N. Parrish is a staff writer for Trib Total Media. She can be reached at 412-380-5662 or tparrish@tribweb.com.

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