According to The Center for Generational Kinetics, Millennials are now the largest generation in the U.S. workforce, and the fastest-growing generation of customers in the marketplace. Though their numbers are strong, their financial situations are not. While there are certainly exceptions, Millennials are launching their lives later, often strapped with burdensome student loan or other debt, with lower or missing FICO scores, and a history of postponing large financial purchases. Couple these challenges with Millennials’ demand for high tech/low touch encounters and auto lenders have their work cut out for them.
As the Internet has grown up, so have Millennials. This means that as the Internet became more sophisticated, providing immediate access to everything from encyclopedias to fast food delivery, this demographic has become accustomed to immediate gratification through impersonal communication.
In addition, this generation has the greatest level of student loan debt in the country’s history, and it’s rising because wages have been stagnant for several years. According to the Project on Student Debt, 68 percent of 2015 bachelor’s degree recipients graduated with an average student loan debt of $30,100 per borrower. The debt load not only affects the amount of savings they have for purchases and down payments, it also greatly impacts their credit scores.
This is one of the biggest reasons why Millennials have put off the milestones of adulthood. They simply can’t afford to move out of their parents’ homes, buy cars, get married, buy houses, and have children. Saddled with debt yet striving for success, Millennials also face another challenge. According to a PwC survey, only 24 percent of Millennials surveyed could demonstrate basic financial literacy. In another survey of Millennials already saving for retirement, a third said they were “not sure” how their money was invested. Not knowing the nuts and bolts of money matters can hurt Millennials’ personal financial prospects – as well as their ability to successfully negotiate loan terms for a car purchase. Continue reading