Volkswagen Financial Services (VWFS) has recorded a double digit jump for Millennial and Gen Z customers switching to vehicle finance during the pandemic.
VWFS said 25-34 year-olds saw a 12% jump, from 6% to 18%, while 18-24 year-olds recorded a 10% jump from 8% pre-pandemic, to 18%.
Using a nationally representative survey of 2,000 people, the car finance specialist has found that the COVID-19 pandemic has driven down the percentage of people buying cars outright from 45% before the pandemic to 36% now.
Meanwhile, the percentage preferring to get a car on finance has increased significantly from 7% before the pandemic to 11%.
This survey data is supported by year-on-year sales records from VWFS showing that the 20 – 34 age group increased their share of total finance sales by 3% from 2019 – 2020 (20-24 years old (+0.5%) 25-29 years old (+1.4%), and 30-34 years old (+1.1%)).
The under 35 age bracket now holds a 36% share of the market, and the 25-34 age group is the fastest growing demographic for finance agreements.
Mike Todd, VWFS chief executive, said: “From our research the younger generation between the ages of 20 to 34 are driving the changes we expected in five years, today.
"Over the years we have seen subscription, pay as you go services flood into our lives across all sectors, but chiefly in media sectors.
“Squeezed finances and altered priorities created by the pandemic have accelerated this move to the car buying sector, and as a result, we have seen a larger than anticipated swing towards finance packages.”
While the next generation is leading the cultural commuting change, COVID-19 has also altered the way the older generations think about travel.
VWFS’s research shows 17% of the over 70s considering a switch to electric cars.
Todd said: “These trends don’t mean fewer people buying cars, it means that the way that people own and use cars is different and we have to change to fit that.
“We’re looking at a different world, shaped by a virus, but one that was likely to have happened in the future. Our role as a mobility provider is to make that transition easier, simpler and more affordable for everyone concerned.”