Millennials are developing a taste for expensive—and even luxury—automobiles and taking out cheap leases so they can afford them, Bloomberg reports.
Lexus, Jaguar, Cadillac and Acura are among the top 10 brands leased by millennial buyers, along with other pricey cars like Subaru, Mini and Buick, according to Edmunds.com, an auto pricing website. The 18- to 34-year-old group leases 60% of its luxury cars, compared with about 50% for other buyers, Edmunds says.
The leasing data is more evidence that American millennials—aka Generation Y—like cars after all, defying predictions that they’d shun driving for public transportation or Uber. They are now the second-largest group of new car buyers, after their boomer parents, and will buy or lease almost 2 million vehicles this year. Millennials typically prefer to spend $300 max per month on a car and put down no more than $3,000, according to Edmunds. Leasing is the only way to get the car they really want and allows the tech-hungry cohort to get a new vehicle every two or three years.
“If they see a chance to get into a nicer car while staying within their budget, they’re likely to explore that opportunity,” Jessica Caldwell, director of industry analysis at Edmunds, tells Bloomberg. “In most cases, leasing opens the door to the bells and whistles that they couldn’t otherwise afford.”
Of the 10 brands they lease the most, only Toyota’s entry-level Scion brand and Fiat Chrysler’s Ram pickup brand are mainstream, Caldwell said.
Although millennials represent 24% of the U.S. population, they account for just 8.7% of luxury car customers and 11.6%of the mass market, according to Edmunds. But analysts say their appetite for cars will pick up as the economy accelerates and more and more Gen Yers move to the suburbs where public transportation is spotty.
