For years now, buy here pay here dealers as well as new and pre-owned dealers have been concerned over the apparent lack of interest in many Millennials show in driving. According to one Survey by Erie Insurance, however, that may be changing. Although the survey’s focus group was relatively small and localized, if it reflects a trend, it could have noteworthy effects on buy here pay here dealerships.
In their survey of over 2,000 participants, the Erie, PA. based insurance company found that 85% of Millennials who did not yet own vehicles planned to purchase in the future and 89% of participants in Generation Z, (ages 14 to 17 years old,) who did not yet have drivers’ licenses planned to get one. Nearly all of the Generation Z participants planning to obtain a license stated that they were excited about driving.
This is a significant change from a few years ago, when the trend showed young Americans like Millennials having a strong disinterest in vehicle ownership. It seems that more and more are giving up Uber and bus passes in favor of purchasing a car or truck of their own. According to Erie Insurance Vice-President Jon Bloom, this indicates that vehicles remain an important acquisition in American society. When you get down to it, owning or leasing a vehicle is still the best way to get around in the United States.
What does this mean for buy here pay here dealers? Even though many Millennials have entered the professional workforce, rising interest rates mean that it will still be harder (and costlier) to purchase a new vehicle unless the buyer has nearly perfect credit. (Read our article Subprime Auto Interest Rates Are Rising.) This, combined with the fact that many members of Generation Z will likely be trying to build credit when they purchase their first car, makes it clear the used car lots and buy here pay here dealerships may well see some increase in business in the near future.
Of course, the recent survey only included persons in and around the Erie, PA. area, so it is too early to say whether those findings are true of the entire United States. They do, however, hint at a possible shift in attitudes about driving among Millennials and members of Generation Z. While we must all wait to see what the future brings, it seems there may be yet another reason for buy here pay here dealers to be cautiously optimistic.
(Source: PR Newswire)