Car-buying platform Edmunds.com, after analyzing their own data, reports that Millennial car buyers prefer to lease a vehicle so they get more car for their money.
Edmonds says although there are longer-term benefits to buying a car outright, millennials seems to prefer the instant gratification of driving a bigger or more luxurious vehicle. Millennials cover the age range from 18 to 34.
This year so far, 28.9 percent of all new car purchases by Millennials were leases, a 46 percent increase in the numbers from five years ago. The 28.9 percent for millennials is greater than the industry-wide lease penetration rate of 26.7 percent.
“Most Millennials understand and accept that they’re on a tight budget and that they need to stick to it. But it doesn’t mean that their financial constraints limit them only to the most basic vehicles to get from Point A to Point B. If they see a chance to get into a nicer car while staying within their budget, they’re likely to explore that opportunity. In most cases, leasing opens the door to the bells and whistles that they couldn’t otherwise afford.” – Jessica Caldwell, Edmunds.com Director of Industry Analysis
To see the difference in the cars you can have for the same amount of money, Edmunds has a “How Much Car Can I Afford?” Calculator. Using a $2,999 downpayment and $299 per month, the calculator shows a financed purchase can get you into a $20,000 car, but a lease can have you driving a $35,000 car.
The sample numbers came from a survey in June this year, by Edmunds and Morpace Inc., a global market research firm.
Some Midwestern cities had the highest rates of leasers. For example, Millennials in Grand Rapids, Michigan are 33 percent more likely to lease than the general population in that city. In Minneapolis-St. Paul, the number is 30.5 percent more likely, and Millennials in Milwaukee are 26.4 percent more likely to lease than other people there.