When you see a young adult with a nice car, what is your first thought in terms of ownership? If you’re like most people, your gut reaction is that they must have leased it. Leasing is usually less expensive than buying, and with young adults constantly upgrading, it’s a perfect choice. While this makes complete sense, it’s not what is going on with Millennials. You’ll probably be surprised at what they really prefer when it comes to vehicle purchases, especially given all the talk about how Millennials are shunning cars.
Debunking the Perception of Millennials
There’s a perception that Millennials shun ownership because they enjoy the financial savings that come along with leasing. In addition, the perception is that they are a disposable generation – meaning instead of keeping purchases for as long as possible, they would rather get rid of them and buy something new (even if it’s new to them).
Perceptions are sometimes wrong.
According to a survey by Elite Daily, 71% of young adults report they would rather buy than lease a car. The national average of people making purchases shows that 80% choose to own a car rather than lease one.
So, why is it that Millennials are changing the trend in the car buying spectrum? There may be a few factors going on with the changing trend:
- Millennials are delaying marriage and starting a family because they are finishing up higher education and starting a career first. This leads them to delaying the cost of a wedding, purchasing a home, and childcare items. A new vehicle is one of the only purchases that isn’t very expensive and they don’t need a spouse or children to purchase it. It’s an independent purchase that they can afford at this time in their life.
- Millennials are dealing with huge amounts of school debt, and while you would think that would mean they would lease a vehicle because it may cost less per month, it’s the opposite. The Pew Research Center found that Millennials with school loans are more likely to accumulate debt faster than those without student loans. Millennials probably figure they are already in debt, so there’s no harm in throwing in another few thousands of dollars.
- The ability for Millennials to purchase a vehicle online is also contributing to the trend. Millennials prefer to do everything online, and when they can research and shop for a good price on a new car, they are more likely to do it.
These factors contributing to the changing trend shows us that Millennials want more for themselves. Along with being eco-conscious, health-oriented individuals, they prefer to own a car over sharing it with a car dealership or bank. It may be that they want that power that comes with ownership, especially since they aren’t interested in entering into marriage or having children as quickly as past generations. It could also just be because they view ownership of a vehicle as a stepping stone in owning a house and taking on more expensive obligations.
In any case, as you’re admiring the new car a millennial has purchased, don’t ask if he leased it. Just assume it was purchased because you’ll likely be correct.