Ride- and car-share services are becoming more popular with millennials, but a new study finds they are finally warming up to owning their own vehicles.
According to new research by online exchange LendingTree, drivers ages 18 to 34 accounted for roughly 33 percent of more than 1 million auto-loan requests it received during the first quarter. That compares with roughly 27 percent in the same period of 2013, which is as far back as the firm’s data goes.
The results stand in contrast to prior auto industry rhetoric, which contends millennials are not interested in purchasing their own vehicles. The data also come a few months after a separate report found that Americans ages 17 and younger have a greater desire to buy a new vehicle than millennials did at their age.
“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.
Yet millennials are more conservative than older generations when requesting financing. For those ages 18 to 34, LendingTree said the average auto-loan request was $14,825. That’s roughly $3,000 lower than the average amount sought by those 35 and older.
Millennials’ preference for less-costly used vehicles is likely driving this trend, the lending firm said. On average, about 46 percent of the cohort’s requests last year were for used vehicles, compared with 44 percent for older drivers, according to the firm’s data.
LendingTree declined to share what percentage of millennials’ loan requests are accepted, citing competitive reasons.
Since the recession, automakers and dealers have bemoaned millennials’ lack of interest in buying a vehicle. A number of factors kept them on the sidelines, including unemployment, student-loan debt and the growth of ride-hailing services such as Uber and Lyft.
But as the generation ages, many of its members are finding stronger financial footing, boosting their desire for their own vehicle.