Auto Financing Gaining Traction With Millennials, Study Shows
May 26, 2016
CHARLOTTE, N.C. — LendingTree has found that a growing number of auto finance requrests are coming from Millennials. The demographic current accounts for about 34% of total auto finance requests in the nation, a 7% increase from 2013.
Memphis, Tenn., Milwaukee, Wis., and St. Louis were the Top Three cities where Millennials are seeking vehicle financing, according to the firm's study.
“With unemployment among millennials improving, coupled with lower interest rates and low gas prices, the share of millennial auto loan requests is on the rise,” said Doug Lebda, founder and CEO of LendingTree. “Although the share of millennial auto loan requests is relatively lower in densely populated urban areas, the auto market appears to be enticing aging millennials.”
In Memphis, Tenn., Millennials accounted for 41.98% of all vehicle financing requests. In Milwaukee, Wis., they accounted for 40.68%, and 37.88% in St. Louis. The average finance amounts for those three cities are $11,791.22, $11,413.42 and $12,352.36 respectively.
Nationally, auto finance amounts average slightly higher at $14,825.34 for Millennials and $17,938.74 for applicants 35 years of age or older.
The study also found that Millennials favored new vehicles over used. About 53.6% of Millennials auto finance requests were for new vehicles, while the other 46.4% were for used. The Top Three most popular cars for Millennials in this study were the Nissan Altima, Dodge Charger and Honda Accord.
Borrowers 35 years of age or older showed similar results, although they leaned slightly more toward new vehicles. For those over the age of 35, 55.8% of auto finance requests were for new vehicles and 44.2% for used.
From May 15, 2015, to May 15, 2016, LendingTree analyzed the percentage of total auto loans coming from consumers between the ages of 18 and 34 in the nation’s 50 largest cities, according to the company.