Millennials, categorised as those aged 19-36, seem to be driven by status when it comes to car purchases. New research from Admiral reveals that 53% of drivers in this age group feel pressure to buy a certain car – even if their budget says otherwise.
While 30% of millennials were guided by their budget when choosing a car, 22% admitted their friends influenced which car they picked. Additionally, 22% said Facebook had a big impact on their buying decision and 16% were swayed by Instagram. In contrast, just 6% of generation X drivers (those aged 37-54) were influenced by Facebook and just 4% by Instagram.
Some 14% of millennials even said that celebrities had influenced their choice of car, compared to 4% of gen X car owners. As a result of this social focus, the research found younger drivers to be more reliant on credit, with 64% using car finance to fund their purchase, while only 38% of generation X have done the same.
Despite much divergence, the most common monthly budget for car finance is similar between the generations, at between £300 and £399. However, millennials appear to be more likely to push their budget, as 31% said they would be prepared to spend more than £500 per month on car finance, compared to 12% in gen X.
While the average value of cars owned by millennials is lower than those of generation X, at £6,856 compared to £10,057, the younger generation seems to be willing to spend more of their salary on owning a car, with 13% even saying they'd give up half of their monthly salary for a car.
"In the current economic climate, where traditional milestones like owning a home or securing permanent employment are increasingly out of reach for the younger generation of millennials, it seems that other factors are influencing decisions like car buying," Dr Dean Burnett commented on behalf of Admiral. "Social status in an increasingly interconnected world is becoming far more important as a result."
It may be tempting to go into debt to get that dream car, but it's important to think about the future. Do the maths to see what you can afford – including fuel, tax and maintenance costs – then start saving towards your goal. If you do decide to take out some sort of loan to pay for the right car, make sure to check your credit rating first, and do what you can to improve it if need be.
Once you have a car, don't forget to find a car insurance policy that is both competitive and value for money; remember that the cheapest policy isn't necessarily the best.
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