Millennials get a bum rap as being less interested in driving and cars -- and in auto finance -- than previous generations, TransUnion said in a study released last week.
In fact, millennials are the fastest-growing group of car buyers in auto lending, the TransUnion study found. Millennials represented 27 percent of total auto loans and lease originations combined in 2014, up from 16 percent in 2009, said Jason Laky, senior vice president and automotive business leader.
“They are starting to follow the path of earlier generations” in terms of car ownership and auto finance, he told Automotive News last week.
Laky said millennials’ changing life stage and the improving economy probably account for the increase in originations for that age group, defined for the purposes of this study as individuals 18 to 34 years old. The oldest millennials were born in 1981.
Laky said TransUnion only tracks those who are at least 18, so for the present study, the youngest millennials were born in 1997, he said.
Coming of age
“They’re maturing into their adulthood. They’re getting to the point where they’re employed, they’re having families, they’re moving to a place where they’re financing just like previous generations,” he said.
Laky said millennials might have been more active in auto finance sooner, but the timing of the Great Recession probably served to delay their entry into the market in greater numbers.
Auto-finance originations for millennials grew to 27 percent of all originations in 2014 from 24 percent a year earlier, an increase of roughly 10 percent.
Gen X was the biggest generation in terms of auto originations, at 34 percent, but that number eased fractionally from a year earlier, TransUnion said. Baby boomers accounted for 32 percent of originations, down from 34 percent.
Gen X, considered by this study to be those born 1965-80, were the biggest absolute borrowers, with an average balance of $21,779, TransUnion said. That was an increase of 3.7 percent from 2013. Baby boomers, defined as those born 1946-64, were close behind, at an average of $21,055 in 2014, up 3.5 percent.
Millennials had an average outstanding balance of $18,678, up 4.1 percent -- the biggest percentage increase of any age cohort.