How Millennial Car Buying Habits Differ From Other Generations

Millennials are taking out auto loans, but they are doing so on their terms

Shaun Plum
MoneyTips Contributor

Borrowing Automotive Loan

How Millennial Car Buying Habits Differ From Other Generations
May 16, 2016

It was so not long ago that auto industry experts were stating that Millennials had no desire to own their own vehicle, but new information indicates that this may no longer be true. According to Dealertrack's vice president of market performance and F&I solutions, Jason Barrie, 35 percent of all new auto loans in 2015 went to Millennials. However, these younger buyers have somewhat different buying habits than older generations, something of which dealerships must be aware. Here are a few ways that the car buying habits of Millennials are different:

  1. They are impatient. Thanks to the Internet and other types of technology, Millennials are used to having information and services available on demand. A study carried out by Autotrader reports that almost a fourth of all Millennial car shoppers - 23 percent - will not wait ten minutes to test drive a vehicle. Twenty-two percent said that twenty minutes was too long to wait for financing and paperwork

  2. They like longer loans. Millennials are facing an uncertain job market, plus many have a large amount of student loan debt. To keep their finances under control, they want longer auto loans so their monthly payments are lower. In 2015, the average auto loan for a new car sold to a buyer under age 34 was 70.2 months.

  3. Millennials are educated. Most arrive at the dealership ready to test drive a specific vehicle. They have done their research, they know what they want, and they do not want to hear sales pitches.

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Nancy | 05.16.16 @ 17:21
My Millennial daughter is already more Savvy financially and dealing with loans of any type then I ever was.
Carla | 05.16.16 @ 17:22
I agree that millennials are very impatient because my son is exactly like that. Everything here is spot on.
Leah | 05.16.16 @ 17:24
Good information to keep in mind since i plan on buying a car within the next year!
Alec | 05.16.16 @ 17:25
I'm a 20-something and I can agree I am impatient. I would not be willing to wait for a long time in a dealership. If I do my research beforehand and come prepared, which I would, I expect the trip to take less time since I have prepared for it. If the salesman isn't prepared or drags their feet, that would be irritating.
Daniel | 05.16.16 @ 17:25
Luckily that generation seems to have "learned" from the mistakes the previous generation made, and takes advantage of the wealth of information available to them when making choices
trish | 05.16.16 @ 17:25
I think that they have to be! With the uncertainties of the job markets now they have to learn more and spread out their loan. Immapitience seems to cover most generations now...
irene | 05.16.16 @ 17:26
Interesting. personally we have never taken out a loan for a car, I would rather pay cash and buy used than to make a car payment
Erin | 05.16.16 @ 17:26
I'm all for doing your research beforehand. The last time we bought a vehicle, we had the price settled before we even went to the dealership. It's so much nice than listening to their 'pitch'. Regarding millennials, it all depends on the individual. My oldest child has no interest in even driving, let alone owning a vehicle, but my next one is itching to go already at 14.
$commenter.renderDisplayableName() | 11.29.20 @ 20:13