Turo Index reveals Canadian millennials are increasingly priced out of car ownership due to inflation

Young millennials are particularly affected by the high costs of owning a vehicle, an asset that sits idle 95 per cent of the year. 

TORONTO, March 18, 2024 /CNW/ - The third annual Car Ownership Index, a benchmark study from Turo, Canada's leading peer-to-peer car sharing marketplace, in partnership with Leger, has revealed that high costs are pricing Canadians out of car ownership. In particular, more than half (56 per cent) of young millennials (aged 25-34) surveyed said they are less likely to buy or lease a vehicle this year due to recent inflation rates, which is significantly higher than the average across all ages (46 per cent). In comparison, last year, across all age groups, this figure was lower (39 per cent) suggesting Canadians' financial concerns have continued to grow over the past year.

Additional figures from the Index illustrate young millennials are struggling to both retain and obtain vehicles:

• 17 per cent of young millennials surveyed are planning to stop owning or leasing their car in the future. This figure drops to 12 per cent across all age groups.
• Of the young millennials surveyed who own or lease a vehicle but are planning to stop in the future, over half (52 per cent) cited financial reasons, which is higher than the average across all age groups (42 per cent).
• Young millennials have the highest estimated cost of ownership at $6,176 per year. This is significantly higher than the average of $5,025 per year across all age groups.

While the findings reveal that young millennials more strongly feel the impact of rising costs, macroeconomic conditions have also impacted Canadians' car buying habits across all ages. 

This year, 37 per cent of Canadian respondents without a vehicle cited their number one reason for not owning or leasing one as "having a car is too expensive" ? an increase from last year's 32 per cent.

Although 85 per cent of Canadian respondents own or lease a vehicle, their cars sit idle 95% of the year. Despite the increasingly high costs and low usage rates, cars continue to provide an indispensable service with 78 per cent of car owners surveyed saying it would be impossible for them to not own one, and more than half (57 per cent) who work stating they would have to change jobs if they did not have a vehicle.

"As the cost of living continues to rise, Canadians are reconsidering the traditional car ownership model, which can place a high financial burden on the owner. Vehicles depreciate in value and have ongoing expenses, which persist even when unused," said Cedric Mathieu, Senior Vice President and Head of Turo Canada. "Understandably, car ownership is irreplaceable for many, but for young millennials who are more inclined to end ownership than any other age group, car sharing offers greater flexibility by allowing guests to pay for a vehicle exclusively when they need it, whether it be for a long getaway or quick business trip." 

Car Sharing adoption
Young millennials are paving the way for increasingly widespread car sharing adoption, with 21 per cent of respondents having used a car sharing service in the past 18 months. This figure is significantly higher than the average across all age groups (nine per cent).

For those who have used car sharing, their responses indicate a positive experience:

• The majority (81 per cent) are open to using the service again
• Respondents' main motivations for using car sharing include price (24 per cent), not owning/leasing their own vehicle (20 per cent), and the belief that car sharing is more convenient than car rental services (16 per cent).
• Respondents' main use cases for car sharing are domestic leisure travel (37 per cent), errands (29 per cent), and international leisure travel (16 per cent)

Car sharing also benefits owners looking to monetize their existing vehicles. One in 10 car owners surveyed (10 per cent) are open to listing their vehicle on a car sharing marketplace. Thirty-four per cent cited additional income as the main reason for sharing their vehicle, while 26 per cent cited offsetting the cost of ownership or leasing. Additionally, 19 per cent said not using their car frequently was the primary motivator.

"Turo enables Canadians to earn hundreds of dollars a month on average in additional income by sharing their vehicles, providing a solution for owners who wish to offset costs without relinquishing their car entirely," said Mathieu. "Additionally, it offers non-owners convenient access to vehicles tailored to their preferences without long-term financial commitment."

Electric Vehicle ownership
Monetary factors also have a significant impact on Canadians' views towards electric vehicles (EVs):

• 29 per cent of respondents who don't plan to buy or lease an EV cite high vehicle costs as the primary barrier.
• Over half (53 per cent) of respondents intend to purchase a hybrid (40 per cent) or EV (13 per cent) rather than a combustion engine vehicle. In comparison, last year, 16 per cent of respondents planned to purchase an EV next.
• Among Canadians specifically interested in EVs, saving on gas (40 per cent) is the top motivation.

Beyond financial considerations, Canadians' lack of experience with EVs remains a significant barrier to adoption, despite continued interest. The vast majority (81 per cent) of Canadians have never driven an electric vehicle before, but half of Canadians surveyed (50 per cent) would be more comfortable buying an EV if they had the opportunity to test drive it for a few days or weeks before making the decision to purchase.

"Through our wide selection of EVs and hybrids, and flexibility with multi-day bookings, Turo offers curious Canadians an ideal avenue to try an electric vehicle of their choice and experience how it fits into their everyday lives," said Mathieu.

"The Index reveals a gap between Canadians' interest in EVs and their limited firsthand knowledge," said Christian Bourque, Executive Vice-President and Senior Partner, Leger. "Half of those surveyed would be more comfortable purchasing an EV if they had the option to complete an extended test drive, indicating its potential as an educational tool for fostering adoption."

For more information from the report, visit the Turo website.

About the study:
The survey was conducted by Leger for Turo in Canada, from December 11th to 18th, 2023. It consisted of a representative sample of 1,500 English and/or French Speaking Canadians 25 years of age or older. Only the official analysis report, from which this press release is inspired, is endorsed by Leger.

About Turo
Turo is the world's largest car sharing marketplace, where you can book the perfect car for wherever you're going from a vibrant community of trusted hosts across the US, UK, Canada, Australia, and France. Flying in from afar or looking for a car down the street, searching for a rugged truck or something smooth and swanky, you can skip the rental car counter and choose from an extraordinary, totally unique selection of nearby vehicles shared by local hosts. Entrepreneurs can take the wheel of their futures by becoming hosts and building car sharing businesses on Turo, leveraging our established platform to scale their businesses to meet their goals.

With an unwavering mission of putting the world's 1.5 billion cars to better use, Turo unlocks the hidden value in idle and underutilized assets, empowering anyone to get in the driver's seat. Find your drive® ? Turo.

About Leger
Leger is the largest Canadian-owned market research and analytics company, with more than 600 employees in eight Canadian and US offices. Leger has been working with prestigious clients since 1986. For more information: leger360.com.  

SOURCE Turo Inc.