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Gen Y: We can't afford cars, but if we could they'd be green

If they had the money to buy a new car, many young people say that they would prefer to buy something green, such as the Prius shown here.
If they had the money to buy a new car, many young people say that they would prefer to buy something green, such as the Prius shown here.MARK BLINCH / Reuters

Generation Y -- the kids of the Baby Boomers -- worry about being able to afford a car, but if they could, they would most likely choose an eco-friendly vehicle, a Deloitte study shows.

Sixty-one percent of Gen Y respondents—whom the study defines as people born between 1977 and 1994—plan to buy or lease a car within the next three years and 23 percent within the next year. But 8 percent have no plans to buy or lease a vehicle.

Among the respondents who don't own or lease now, 80 percent said they cannot afford to buy a new car, with 75 percent expressing concerns about operational and maintenance costs.

"Affordability is a huge issue for Gen Y," said Joe Vitale, global automotive sector leader at Deloitte. "Many in Gen Y have had a tough time financially, and that impacts their decisions."

A particularly interesting survey result involves Gen Y's attitudes about fuel-efficient, green cars.

Fifty-three percent think they will be driving an alternative engine vehicle five years from now, with gas-electric hybrids being the most preferred option. Further, 61 percent of those surveyed support government programs that reward consumers for choosing alternative or high-efficiency engines.

"They are more likely than other generations to support government subsidies for alternative power cars," said Craig Giffi, leader of Deloitte's U.S. auto industry practice.

The percentage of new vehicles going to 18- to 34-year-olds fell in 2013, despite automakers and auto dealers' offering leases with payments as low as $200 a month, according to Edmunds.com.

Rising prices area likely factor. According to Kelley Blue Book, the average price paid for a new vehicle was $32,086 last year—almost $400 more than in 2012.

Higher costs have become a challenge not just for Gen Y consumers but for automakers. Attracting younger buyers becomes more difficult as the price tag for a new vehicle edges higher.

The group is also affected by their desire to be connected at all times, Vitale said, adding that "40 percent of Gen Y prefers taking public transportation so they can stay connected with their friends."

The indifference doesn't surprise Giffi, who said that Gen Y "is three times as likely as other generations to step away from buying or leasing a car."