Average Millennial Auto Debt Rises in Q2 2019
As we recently learned, this holiday weekend, a great number of Americans will be shopping for new vehicles. While this time of year might offer some strong deals and incentives, it seems that many Millennial car buyers are taking on more auto debt than they have in recent years. In fact a new report by Experian finds that the average balance for consumers of this generation is on the rise.
For their study, Experian defined Millennials as those aged between 23 to 38. According to their findings, the average auto debt among this group rose to $18,201 in the second quarter of the year, marking a 3% year over year increase. Despite that gain, the generation comes in 5% below the national average of $19,231. Meanwhile the youngest generation (dubbed Gen Z) once again had the lowest auto debt with an average of $14,272 — even lower than The Silent Generation — although that was up 5% from this time last year.
While the year over year increase in auto debt for Millennials was relatively modest, the average balance has increased significantly since 2012. Experian notes that Millennials have seen auto loan balances swell 28% in that time — the largest rise among any generation. However Gen Z’s balances weren’t too far behind, climbing 27% over the past seven years.
Interestingly, the state where Millennials had the highest average auto debt balances might surprise you. Instead of the Golden or Empire States, it was actually Wyoming that came in first with an average of $24,414. Incidentally that ranking holds true across all generations as well. Additionally total average debt amount Millennials in the state also topped the list with $96,534. Second place for average Millennial auto debt was New Mexico ($22,797) followed by Texas ($22,607), Louisiana ($22.479), and Puerto Rico ($22,205).
On the other end of the spectrum, Millennials in Michigan were found to have the lowest average auto debt, reaching just $13,768. That was followed by Rhode Island’s $13,951 average as well as Massachusetts ($14,571), New Jersey ($14,780), and Connecticut ($14,810). Notably, however, most of these states saw higher total balance averages than many of these “highest average auto debt” counterparts. For example, Massachusetts’ $93,193 easily topped all but Wyoming on the previous list, while the same can be said of the $83,269 average in Connecticut and $82,174 average in New Jersey.
The good news is that, despite balances rising in the second quarter, there’s reason to believe they could fall a bit from here. That’s because the Federal Reserve recently lowered interest rates for the first time in nearly a decade. Still, while this may have some impact, what’s more important is that Millennials and other car buyers do their research ahead of time so that they can get the best deal on a vehicle and help bring their total debt balance down.