Automotive
A lot has been written and said about the Millennials' relationship with cars lately, and the fact that they are showing less and less interest in driving and owning a car, mostly likely due to a combination of a change in attitude towards cars – preferring to live in the city and use alternative modes of transportation – and the limited job prospects they face.
Now there is a new study that suggest that there are still a lot of Millennials that do want to own cars, but most of them opt to lease, instead of buying. According to a survey conducted by Edmunds.com, Millennials are now more likely to lease a car than they have been over the past couple of years, and they prefer leasing over buying more than Generation X and Baby Boomers do.
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Edmunds.com analyzed car registration data provided by Polk, and found that almost 29% of all new car purchases by Millennials (age 18-34) in 2015 were leases, as compared to the overall lease rate of 26.7% for consumers of all ages. Based on the data analyzed, researchers determined that leasing by Millennials has increased by 46 percent over the past five years, with leasing by all car buyers increasing by 41.7 percent during that same period.What these findings show is that Millennials can not afford to buy a vehicle, so they tend to opt for leasing, instead. The out-of-pocket expenses associated with leasing a car are substantially lower than those associated with buying. This is because it usually requires no down payment and it comes with lower monthly payments. The opportunity to have a new car without having to make a significant down payment is especially appealing to Millennials, since most of them don't have as steady incomes as older generations do.
On top of that, with a lease, consumers get to drive a more expensive car than they would if they opted to buy, thanks to the lower monthly payments associated with leasing.
"Most Millennials understand and accept that they're on a tight budget and that they need to stick to it," said Edmunds.com Director of Industry Analysis Jessica Caldwell. "But it doesn't mean that their financial constraints limit them only to the most basic vehicles to get from Point A to Point B. If they see a chance to get into a nicer car while staying within their budget, they're likely to explore that opportunity. In most cases, leasing opens the door to the bells and whistles that they couldn't otherwise afford.”
| By Jordan Perch | Embed |
Author Bio - Jordan Perch is an automotive fanatic and “safe driving” specialist. He is a writer for DMV.com, which is a collaborative community designed to help ease the stress and annoyance of “dealing with the DMV.”
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