Are Americans really driving less?
"Americans are Driving Less" -- at least that's what the headline of a recent press release from the National Association of Insurance Commissioners (NAIC) said. However, it seems the rule-making body for America's insurance industry, which supposedly keeps track of how we drive and how much we pay for auto insurance, is asleep at the wheel.
"This is a mistaken reading of the trends," said Robert Hartwig, former head of the Insurance Information Institute who now teaches finance at the University of South Carolina.
"We are not showing a decrease," agreed spokesperson Tamra Johnson of the American Automobile Association (AAA) in Washington, D.C. "The most recent data I have is our American Driving Survey, which shows Americans drove 2.45 trillion miles in 2015, a 2.4 percent increase from 2014."
Johnson won't have the 2016 figures until September but added: "Preliminary data shows an increase from the previous year." And according to Hartwig, 2014 saw a 3.4 percent rise, the fastest growth since the turn of the century.
Driving accidents and deaths are yet another indication that the NAIC is wrong. According to the National Highway Traffic Safety Administration, fatalities rose more than 7 percent in 2015, the most recent year for which definitive data exists.
So what's prompting the nation's insurance standards-setters to think people are driving less? Apparently, this notion comes from all the stories written about "millennials," the generation born between 1980 and early this century. "Carrying no driver's license has been prominent among millennials and members of Generation Z for years," claimed the NAIC in its press release.
If this is true, what replaced it? "Exciting transformations in mobility, including ridesharing, increased use of public transportation and self-driving vehicles," said NAIC President Ted Nickel, who's also the Wisconsin Insurance Commissioner.
But Nickel's belief runs counter to a recent survey by Bankrate.com, an online provider of financial information about credit cards, loans and taxes. Millennial spending on gasoline is $254 a month, or $3,048 a year, more than 20 percent higher than that of older adults, which indicates the younger generation is driving.
How can the NAIC, which comprises all 50 state insurance regulators, be so mistaken?
To be fair, many other surveys about millennials haven't gotten it right, either. One problem is the lack of a clear definition of who's actually part of this generation.
Does it include those born up to the year 2002? If so, these individuals are extremely different from those born in 1980, and nothing shows this more clearly than accident rates, which are far higher among 19- to 24-year-olds than any other group, even 16- to 18-year-olds. And where does Generation Z (post millennials) begin? Dates are fuzzy and overlap.
Risky driving: portion of each age group speeding, running a red light running or texting behind the wheel over last 6 months
That's why generational generalizations don't always work. And they particularly don't work when using a catch-all description like "millennial," because poll takers and analysts are biting off more of the demographic than they can chew.
A National Public Radio study of millennials shows that by 2020 they'll encompass the largest segment of the population -- one in three Americans will be a millennial.
Many of them came of employment and driving age at a time when the U.S. was in the throes of the Great Recession. So their internal clocks were shaped by that trauma and the lingering effects that followed.
And this could be one reason, for this particular group of Americans, obtaining a license, buying a car and driving was a delayed reaction. Their student debt in 2012 was double that of 20 years ago, which could also be a reason they delayed marriage, family and home buying. Males marry six years later now than they did in 1960.
But many millennials are aging out of what was once thought, said and written about them, and following in the footsteps of previous generations. This means a lot of people, including the NAIC, are operating on the basis of outdated information, said Hartwig.
"The trends they're looking at are a result of what happened during the 2008 to 2012 recession," said Hartwig. "There was a brief dip in miles traveled during that time."Now, however, the number of drivers is rising, and new vehicle registrations are up as millennials reach their prime earning years. Young adults are no longer living with their parents or opting not to drive. "They're buying homes and living in the suburbs where you can't get an Uber or a Lyft," he added.
Hartwig went on to say that in 2013, for example, 195 million private passenger vehicles were insured and by 2014, that number was 198 million.
That figure is probably continuing to rise as millennials become an even more significant and growing part of the motoring public. "My kids are a prime example," he said. "My kids never said 'I want to Uber it.' They want cars. When people have the means, they get behind the wheel."