If you go to the dealership, find a vehicle you like and sit down with the salesperson, are the first words out of your mouth, “How much is this going to cost me per month?”
Then you might be a millennial.
Instead of focusing on final purchase price or interest rate, millennial car buyers are far more likely to shop based on the monthly payment, according to Hannah Lutz of Automotive News. And since millennials are the fastest-growing segment of car buyers, that definition of affordability is likely to only become more entrenched.
“Young customers are accustomed to a payment, subscription-based culture,” Lutz writes. “It fits in with the rest of their purchasing habits.”
Focusing on the payment amount over the total price isn’t the smartest way to approach a big purchase, as the rising number of “underwater” auto loans attests. But it’s also inaccurate to call this a uniquely “millennial” approach.
After all, the same mindset contributed to thousands of homeowners taking on mortgages they couldn’t afford, leading to the Great Recession, and very few of them were millennials. So whereas it’s fair to expect young people with less experience making large purchases to have different buying habits than older people, it’s also just a fact of life that many people simply make poor financial choices, no matter the age or generation.
Thumbnail photo via Flicker/State Farm