The Exchange

Why More Families Are Shunning Cars

Along with a chicken in every pot, America has long been a place where there’s a car in every driveway. But some of that commitment to freedom and mobility is fading.

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Reuters

In 2012 the percentage of U.S. households without a car rose to 9.3%, according to CNW Research of Bandon, Ore. That was the highest number in the 22 years CNW has been tracking such data. For most of the last two decades, the percentage of carless homes was around 5% or 6%. It spiked to 8.7% in 2011 before hitting the new record last year.

Like tail fins, minivans, SUVs and other automotive trends, the increase in carless homes reflects broader cultural shifts. With the collapse of some exurban communities, more Americans have moved closer to cities and public transportation, where they’re less dependent on cars. More retirees live in planned communities where a golf cart (or good pair of shoes) is all they need to get around. Teenagers using social media to keep in touch seem to feel less drawn to the open road than their parents did at the same age. Innovative new services such as ZipCar and RelayRides give drivers new ways to escape without the hassle of owning and maintaining a vehicle.

A struggling economy

The struggling economy clearly has something to do with it as well. Car sales tanked in 2009 and 2010, and even though they’ve bounced back, sales are still far below the peak established in 2005. Americans have been driving fewer miles per year, for a variety of reasons, including high unemployment, more telecommuting and steadily rising gas prices.

Cars themselves are expensive, too. The average new car costs nearly $31,000, according to TrueCar.com. Low interest rates have helped buyers keep monthly payments relatively low but the typical sticker price is still more than a family with a median income can afford in most cities. If interest rates rise, as many economists expect, the cost of buying a car will go even higher.

Still, it is premature to declare that America’s “driving boom is over,” as a recent study by the U.S. Public Interest Research Group insisted. CNW’s data, for instance, shows that more homes have two, three and even four cars than 20 years ago. This suggests that, while a small but growing segment of the population is shunning cars, a strong majority loves them more than ever. Plus, CNW projects the total number of cars on U.S. roads will hit a new peak this year, and keep rising.

A permanent decline?

The U.S. PIRG study argues that the recent decline in driving is likely permanent, while calling for new transportation policies that focus less on roads and more on public transportation and other alternatives. But there could be another explanation for the pullback in driving. Many car purchases prior to the recession were financed with home-equity loans made possible by the frothy housing market. When the housing bubble burst, much of the financing for new-car sales evaporated. So the slowdown in car sales and the drop in driving miles may simply be a reversion to historical norms, perhaps with a bit of an overshoot.

Besides, new cars these days increasingly include smartphone connections, dashboard apps, tablet-style controls and other features that bring social networks and myriad entertainment options into the passenger compartment. So young drivers will have more ways than ever to connect with their friends and chill out. Somehow the automakers might just convince them that cars are pretty cool after all.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.

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