Not So Raw Data: Who’s Buying New Cars?

This is from a Fed Note published in 2016:

The column on the far right is the one to look at. It means that the likelihood of buying a car didn’t change much for different age groups once you control for family and income:

In summary, the probability model of new vehicle purchases that includes controls for employment, income, and other household characteristics suggests that the differences in average vehicle purchasing rates observed among age groups appear to reflect economic and (non-age) demographic factors….Using a probability model and household-level vehicle purchasing data, we find that new vehicle purchasing rates by age group have declined since 2007, but these declines do not appear to differ significantly by age group once we condition purchases on economic factors such as income and employment.

Our results suggest the decline in the per capita rate of new vehicle purchases since 2007 more likely reflects economic factors than permanent shifts in tastes and preferences for vehicle ownership.

The authors suggest that young people are buying cars at about the same rate as always, once you control for income and family. The Great Recession was a big hit on incomes, of course, one that we’ve only barely begun to make up. And young people have been starting families at steadily later ages since at least the Baby Boomers:

What does this all mean?

FACT:

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