The much-maligned Millennial demographic often gets dinged for their different approach to financial matters. With the advent of online payment methods, many in this generation rarely set foot in a bank or credit union. They don’t write checks; they demand direct deposit; and they transfer funds among friends electronically. So when it comes to financing a vehicle this group is often lacking connections to lenders. Unlike their parents, or grandparents, they don’t have a “banker.”
Recent research fielded by EFG Companies queried more than 500 Millennials across the U.S. about their banking habits and preferences. 68 percent utilize a traditional bank, nearly 26 percent use a credit union, and 6 percent do not use a bank at all. When asked about where they would go to get money for a vehicle, more than 30 percent said they would start with the dealership, and 12 percent said they had no idea. More striking, more than 60 percent had no idea of the benefits of financing through a credit union. This knowledge gap only complicates an otherwise sketchy financial situation for many Millennials.
According to a PwC survey, only 24 percent of Millennials surveyed could demonstrate basic financial literacy. Of those who have begun saving for retirement, a third said they were “not sure” how their money was invested. As a group, their financial situations are not strong, having launched their lives later, strapped with student loan or other debt, with lower or missing FICO scores, and a history of postponing large financial purchases. In fact, 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. Continue reading