Millennials are in the market to buy cars. Are you in the market to lend to them?
According to Cox Automotive, Millennials are on pace to account for 40 percent of all vehicle sales by 2020. While it seemed like Millennials would never enter the market the way preceding generations had, this demographic is quickly making up for lost time.
Most of the Millennials with buying power today entered the job market around 2008 with record high student loan debt. Jobs were beyond scarce. High quality talent from Gen X and Boomers had flooded the market due to a markedly higher unemployment rate. It was virtually impossible for a recent college graduate to compete with a more experienced Boomer or Gen Xer for that entry-level job. Everyone was willing to work for less just to get by. These economic conditions made all those milestones of becoming an adult seem that much further away for Millennials. They deferred student loans, went back to school, moved in with their parents, and created innovative ways to save money.
A decade later, Millennials have a much greater ability to buy a vehicle, buy a house, get married and have children. However, their past experiences have greatly impacted their current buying habits. According to Cox Automotive:
- 83 percent say an affordable monthly payment is very important when selecting a lender.
- 39 percent financed their vehicle through a lender directly.
- 54 percent prefer to research financing options online.