Edmunds.com has discovered millennial car buyers tend to lease their vehicles at a higher rate than the overall car buying population.
According to Edmunds’ analysis of U.S. car registration data provided by Polk, leasing has accounted for 28.9 percent of all new car purchases by Millennials (age 18-34) in 2015. The percentage exceeds the industry-wide lease penetration rate of 26.7 percent, and reflects a 46 percent increase in leasing by Millennials over the last five years. By comparison, the share of leasing among all car shoppers has increased 41.7 percent during that period.
There is a dramatic difference between what Millennial shoppers can afford when they choose to lease compared to when they choose to buy. According to a survey of Millennials conducted in June by Edmunds and Morpace Inc., a majority of respondents (57 percent) said that they are willing to put no more than $2,999 down on a new car purchase, and a similar majority (54.9 percent) said that they are willing to pay no more than $299 per month.
This means shoppers who choose to finance their purchase are generally limited to vehicles priced under $20,000. On the other hand, shoppers who are willing to lease can apply the same upfront and monthly budget toward a vehicle priced as high as $35,000.
Edmunds found that Millennials who acquire a new Ram truck, for example, are 30 percent more likely to lease it than the general population. Other top brands that Millennials are more likely to lease include GMC (26.1 percent more likely) and Lexus (23.9 percent more likely).
