Boomers Far More Likely Than Millenials To Self Finance First Car

Receiving your first car is such a meaningful experience for most people. A new owner being handed the keys can represent so much. But does satisfaction hinge on whether they bought it themselves or if their parents made the purchase?

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In a new study, Leith Cars surveyed 1,000 people about how their first car affected their life down the road. They wanted to know how individuals obtained their vehicle, whether that acquisition impacted their satisfaction, and if it impacted their careers later in life. Read on to find out more.

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michael mauboussin, Credit Suisse, valuation and portfolio positioning, capital markets theory, competitive strategy analysis, decision making, skill versus luck, value investing, Legg Mason, The Success Equation, Think Twice: Harnessing the Power of Counterintuition, analysts, behavioral finance, More Than You Know: Finding Financial Wisdom in Unconventional Places, academics , valuewalkIn 2016, Michael J. Mauboussin completed his 30th year on Wall Street. The analyst, who was working at Credit Suisse at the time, decided to celebrate by reflecting on the ten attributes of great investors he had observed over the previous three decades. He published his ideas in a report in August 2016. I've summarised Read More

First Car

The Perks of a First Car

The top three reasons respondents said they wanted their first car were because they felt owning one gave them more social opportunities (82%), made them more responsible (79%), and opened more work opportunities (79%).

Millennials believed that their first car made them a safer driver, while baby boomers felt that it brought them more social opportunities and made them more responsible. Generation X thought it brought them more options for work.

Approximately 77% of people revealed that their first vehicle was a used car. Just 66% of the respondents surveyed said they were able to choose their first car. Survey participants reported driving their first vehicle an average of 4.6 years and traveling about 43,000 miles in it.

Nearly 1 in 3 millennials said they are still driving their first car.

First Car

The Road to a First Vehicle

The majority (51%) of people said they bought their first car themselves, while 28% said their parents bought one for them. Just 21% of people said they received their first vehicle secondhand.

Older generations were more likely to have bought their first car, compared to their younger counterparts. About 67% of baby boomers, 53% of Gen Xers, and 46% of millennials bought their first vehicle independently. Of respondents who purchased their first vehicle themselves, millennials paid $10,800, on average; Generation X paid $7,500; and baby boomers spent $3,500.

First Car

Respondents who bought their first car themselves were more likely to be satisfied with their vehicle. About 63% of people who did so were very satisfied, compared to the 53% of respondents who received their car secondhand.

The study even revealed that people who purchased their first vehicle themselves were more satisfied with their careers. About 2 in 5 people who did so were satisfied with their jobs, compared to the 28% who received their cars secondhand.

Nearly 2 in 5 people said they would require their children to pay for their first vehicle themselves, but 35% of respondents said they would not. Just over 1 in 4 people said they were unsure as to what decision they would make.

Whether you bought your first car on your own or were given a car, it’s an exciting time in a person’s life. However, it’s apparent that the manner in which you obtain your first vehicle can affect you later in life.