Trend-Setters
Millennials now comprise more than a third of the car-buying population — at 35.1%, according to LendingTree data. That means millennials are industry trend-setters, and lenders are taking note. “With millennials, the focus is on the monthly payment,” said Tim Russi, president of Ally Auto Finance (ally.com). “Leasing can be an attractive option, as well as extended-term financing.” “Leasing is generally popular in the luxury segment, and as millennials gain wealth, leasing could continue to be an attractive option for them,” he said. Ridesharing could also be popular with this group, Russi told AFN. For millennials, ownership is less important and a “pay-as-you-need-it” philosophy is more accepted, he said. At Hyundai Capital America (hyundaicapitalamerica.com), the demographic mix of the lease portfolio has remained fairly stable year over year, even as millennials have been leasing more, a spokesman told AFN.
“We’ve recognized how millennials are driving certain consumer trends and we’re responding to their needs,” he said.
That response included various rebate and college-outreach programs, as well as distributing educational materials for first-time buyers. “We explain the options, including the benefits of buying versus leasing, and we aim to do it in a really clear, straightforward, and relatable way so they [millennials] can feel comfortable with the process and confident in their decision,” he said. “We believe this approach — being upfront and transparent — has the ability to really resonate with millennials who may be buying or leasing a vehicle for the first time,” he said.
College graduate rebate programs have been in place at Toyota Financial Services (toyotafinancial.com) as well. “Certainly our efforts with Scion have been very successful with a younger demographic,” TFS spokesman said. A college graduate rebate can be combined with the Scion Pure Lease program, the spokesman told AFN. A recent study by CreditCards.com (creditcards.com) revealed that more than a third (36%) of Americans aged 18 to 29 believe having a credit card isn’t necessary. “There is a cultural allergy among that generation — they feel they shouldn’t spend money they don’t have,” Finch from LendingTree said. “They have been forced to be practical, post-recession, in order to not repeat the same mistakes as their parents,” he said. “They are Anti-Boomers, in a sense.”