Automotive
Millennial car shoppers are more likely to lease a car than Generation X and the previous generations according to a new study. Whats more is they are are leasing in greater numbers than ever.
Maybe not a lot of Millennials are interested in owning a car nowadays, but the ones that are, prefer leasing over buying, a new report shows. Edmunds.com, the popular website that provides vehicle pricing information, has conducted an analysis to assess Millennials' preferences when it comes to buying a car and find out what their favorite brands are. The findings from the analysis show that not only do Millennials still like driving, but they also have a taste for expensive cars, which comes as a bit of a surprise, given that a large portion of this generation has serious financial problems.
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The report from Edmunds states that Millennials enjoy driving luxury cars even though most of them can not afford to purchase them, which is why they opt to lease, instead. According to the report, Millennials lease cars more than any other age group, with 28.9 percent of all new car purchases made by those between 18 and 34 years old in 2015 being leases, as compared to 26.7 percent for all car buyers. This means that the car leasing rate among Millennials has increased by 46 percent in the past five years."In most cases, leasing opens the door to the bells and whistles that they couldn't otherwise afford."
"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."Leasing makes more sense for Millennials than buying for several reasons. First of all, it allows them to get a more expensive, luxury car, that they would otherwise not be able to afford. With leasing, they get to drive a top-of-the line car for about $300 per month and a down payment of $3,000. Furthermore, it allows them to drive a new car equipped with the latest infotainment and in-car connectivity features every 3-4 years, which they would not be able to do if they were to finance their car.
Edmunds' analysis shows that Millennials are really taking advantage of the benefits that leasing brings. According to the report, the list of favorite brands for Millennials is filled with luxury models that they probably can not afford to buy. Ram is the most popular brand among Millennials, followed by GMC, Lexus, Jaguar and Cadillac, as the top five brands that Millennials are most likely to lease.
To sum up, this report suggests that Millennials have not given up on driving completely, as various studies in the past have indicated, and that they have pretty much the same taste in cars as older generations. The only difference is that they are often on a limited budget, which forces them to lease their cars, rather than financing, which they seem to be fine with.
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