Gen Z And Millennials Challenged With Paying Off Their Cars
So I typically lease my cars because they depreciate so much when you drive them off the lot and I get bored with them quickly so being able to turn them in a lease another car works well for our family. However, whether you lease or buy you still have to deal with those pesky interest rates!
The Cox Automotive/Moody’s Analytics Vehicle Affordability Index has been released and according to Fortune magazine, this index measures how able a household of the median income can afford an average-priced car. As of May of this year, it takes a record 40.6 weeks to buy a car.
Data from credit reporting agency TransUnion also found that younger buyers, like Gen Z and millennials, are having a harder time paying off their cars and are dealing with higher auto loan delinquency rates than prior to the pandemic. The data showed:
- Gen Z had a delinquency rate of 2.21% in Q1 of 2022, up from 1.75%
- Millennials were close behind with 2.14%, up from 1.66%
- Gen X had a delinquency rate of 1.53%
- Baby boomers had even less with 0.93%
“We’ve seen for quite a long time that in terms of payment hierarchy, consumers prioritize their auto loans,” Charlie Wise, SVP of global research and consulting at TransUnion, explained. “Another piece of it is simply that these younger borrowers often have less resources to fall back on when they get into difficulty.”
Source: Fortune
