Trends in automotive purchasing, driving
Posted on Wednesday, June 29, 2016 at 1:33:18 PM
The automotive industry has undergone massive transformations throughout the past several years, driven by younger generations, the evolution of financing options and the longer life spans of cars on the road. Similar changes have been taking place across a range of markets, including home purchasing, but where residential real estate is hitting a relative level of stability, automotive industries are still moving quickly given increased competition.
Understanding some of the trends taking place in car sales and purchases - as well as the financing options that are sprouting up and the common tactics of younger generations who are looking to buy - can help to inform the decision-making process. One of the more important facts to know relates to ride-sharing services such as Uber and Lyft, which are having a profound impact on the financing market.
The new age
Automotive News reported that research conducted by Deloitte Consulting found that ride sharing services are creating an entirely new lending 'ecosystem' of sorts, and one that will likely begin to have more significant repercussions in the coming years. According to the news provider, 35 percent of financing activity will be business-to-business by sometime between 2026 and 2031, which will have a profound impact on the market at large.
The source pointed out that the current landscape sees 95 percent of activity stemming from business-to-consumer financing programs, and the paradigm shift will essentially be dictated by the behaviors of younger individual buyers down the road. What's more, Automotive News noted that autonomous vehicles - which are still largely experimental and do not have a clear date for commoditization - is likely to have a major influence on the automotive financing market as well.
Millennials will be the most important group to watch, and another article pointed to this generation in the context of luxury automobiles.
Will they buy
ABC News recently reported that luxury automakers are confident that millennials will indeed step up and begin to purchase their vehicles, but it will take a big effort on behalf of marketing and customer service departments to encourage purchases. Because the vast majority of luxury cars are owned by baby boomers, this would be quite a transition.
At the end of the day, individuals interested in purchasing a new or used vehicle, but need a financing program to do so, should work with local banks to find the right loan.