Adults under 35 accounted for less than 10% of new vehicle registrations in 2024, marking a new low as younger Americans increasingly reject steep car loans in favour of used vehicles from the late 1990s and early 2000s. The shift reflects the financial squeeze facing younger millennials and gen Z, who face student loan debt, high housing costs and an unforgiving labour market alongside soaring vehicle prices. The average new car now costs more than $50,000, while the average monthly payment for a new vehicle reaches $765, according to credit reporting agency Experian. A record 21% of new-car buyers pay $1,000 or more monthly, according to autos research group Edmunds. By contrast, used car payments average $542 a month, with loan terms stretching to six or even seven years.
The appeal of older vehicles, dubbed Y2K cars, lies in their reliability, affordability and simplicity. These dependable models from the late 1990s and early 2000s, such as Honda Accords and Toyota Camrys, can last 150,000 miles or more with routine maintenance and are economical to run and relatively cheap to insure due to their low resale value. Most importantly, they can be purchased outright with cash. A service adviser at an independent repair shop in Atlanta, Charlie Spears, notes that younger buyers seek vehicles that won't fail them, particularly ones they can fix themselves without relying on dealerships. As newer cars become increasingly digitally complex and manufacturers restrict access to repair information and tools, older vehicles' straightforward mechanics and basic switches and knobs hold particular appeal.
The demand for affordable used cars is reshaping the market. Used vehicles priced under $15,000, the sweet spot for Y2K cars, have shrunk from 21% of inventory a year ago to 15%, according to industry analysis from Cox Automotive. On social media, Y2K cars have become an ironic status symbol representing maturity and lack of pretense, with owners treating mechanical defects as part of the vehicle's personality. Consumer Reports' autos expert Keith Barry attributes some of the appeal to nostalgia, describing an old car with the right music as the closest thing to a time machine. For many young adults already burdened by existing debt and facing an expensive new car market, choosing a used vehicle they can afford outright or finance quickly provides both financial relief and practical independence.