Currently, the vast majority of households own more than one car. And for food reasons. People don’t want to feel locked down in their homes, dependent on which member of the family happens to have the only vehicle at any particular time. Instead, they want freedom and independence. And that means having two or more vehicles.
Five years ago, however, the media and industry groups challenged the idea that families might need two cars. Changes in trends, they said, meant that the two-car household would soon become a thing of the past.
A report issued by KPMG in 2014, for instance, claimed that the number of cars that people owned was going to go down. The prediction was that by the years 2040, less than half of all households would have two cars – a significant shift from the current average.
The analysts said that the change could come as more families participated in car-sharing and waited longer to buy their first vehicles. Just extrapolating trends from the time appears to indicate an overall fall in car ownership.
That process, however, doesn’t look like it is going to pan out. The early excitement about car sharing schemes appears to have died down. And now most families see the utility of owning several cars once more.
Several factors are driving the increase in car ownership – and why we can expect it to continue.
The Falling Price Of Fuel
No matter which way you cut it, fuel prices are falling. During the coronavirus crisis, some oil prices actually went negative, meaning owners were paying buyers to take it off their hands – crazy.
Ah, you might say, petrol-powered vehicles are going the way of the dodo. In a few years, we will all be zipping around in one of Elon Musk’s electric Teslas.
Well, even if that’s the case, fuel costs are going down. Running a car on electricity is much cheaper than regular petrol intrinsically.
High Fertility Rates
SUV cars remain popular in the UK, partly because of high fertility rates. Unlike other developed countries, people here are still having lots of children. And that means families need larger cars and more of them. As kids hit their teenage years, demand for family vehicles skyrockets.
The Wealth Effect
When KPMG released its study on motor vehicle usage in 2014, the great recession was still very much in the rear-view mirror. People wondered whether robust growth would ever return to the economy again.
Soon after, the economy began to resume its historical course. There’s no reason to suspect that this won’t continue long into the future as technology gets better and better. And that is going to give families more options.
Already over the past four years, we’ve seen wages for the average worker rising considerably. There’s a good chance that that process will continue long into the foreseeable future. And if it does, it means that more families will have the luxury of owning two vehicles. Economics will work in their favour.