Phoenix has long been viewed as a sprawling metro area with limited mass transit and heavily dependent on automobiles.
But a Lending Tree analysis of auto loans shows that Millennials in metro Phoenix are not buying into the auto-centric tradition of the Valley.
Valley consumers ages 18 to 34 are ranked near the bottom in seeking auto loans among their counterparts in the nation’s top 50 cities.
The Phoenix-Mesa-Scottsdale area is No. 45 in the percentage of Millennials seeking auto loans in the past year. Millennials in metro Phoenix accounted for only 27 percent of all auto-loan requests for the area in the past year, ending May 15.
Memphis had the highest ranking with 42 percent of Millennials seeking car loans, according to Lending Tree, an online lender.
“With unemployment among millennials improving, coupled with lower interest rates and low gas prices, the share of Millennial auto-loan requests is on the rise,” said Doug Lebda, Lending Tree founder and CEO. “Although the share of Millennial auto-loan requests is relatively lower in densely populated urban areas, the auto market appears to be enticing aging Millennials.”
However, central Phoenix has seen in an influx of young, urban dwellers — less reliant on automobiles — since 2008 when Valley Metro started light-rail service in Phoenix, Tempe and Mesa.
Despite the widely-held belief that Millennials will become an increasingly smaller segment of the total car-buying population, the share of auto-loan requests from Millennials has been increasing in recent years.
Nationally, the share of Millennial auto-loan requests has climbed from roughly 27 percent in early 2013 to about 34 percent in 2016, suggesting a return of younger buyers to the car market. The study does not account for buyers who pay cash for new or used cars.
About 54 percent of Millennial auto-loan requests in the past 12 months were for new vehicles. That is about 2 percentage points below the figure for borrowers 35 and older.
Lending Tree’s analysis also showed that the average loan for metro Phoenix Millennials was $15,921 compared to $17,659 for buyers 35 and older in the area, and $11,791 for Memphis Millennials.
Nationally, the top three new cars Millennial borrowers sought to purchase were the Nissan Altima, Dodge Charger and Honda Accord.