The Filene Research Institute believes there are a lot of cool things about young adults. In 2004, we explored the Gen Y demographic and its influence on financial services, including the importance of aligning credit union products with key life events with COOL Solutions: Say Hi to “Y”. In 2005 we examined the credit-building opportunities for Gen Y, specifically first credit card programs and student loan products with COOL Solutions: Build Credit with “Y”. Now, in 2006 we dive deep into a key financial life event for young adults with COOL Solutions: First-Time Used Car “Y’ers”.
What is the research about?
Used cars were chosen to study since for most young adults, a used car is their first vehicle purchase. For two thirds of the young adults surveyed, this was the first used car they owned. The remaining respondents owned a used car previously, but paid cash for it, or received the car as a gift. A key finding of our study is that young adults report high levels of satisfaction with all aspects of the car buying experience, including researching information, shopping and financing. The other findings are helpful to consider when designing marketing and educational campaigns, as well as planning for young member buying and financing with the credit union.
What are the credit union implications?
Few consumer events involve the emotional weight of a first car purchase. For young Americans, the automobile is a symbol of adulthood, with all of the privileges it promises – freedom, independence and distance from parents. It is usually the first big-ticket acquisition for young adults, a life event that is long remembered which could affect future big ticket purchases.
For the financial institution that finances the vehicle, the first car purchase has considerable traction. If the experience is positive, it could be the start of a lifelong relationship with the consumer. If the experience is distasteful, the young consumer will go elsewhere in the future.
This report is sponsored by PSCU Financial Services.