Leasing Vehicles Popular Among Midwestern Millennials, Report Finds

A report from a popular car-buying website indicates that leasing a car has become a popular option for millennials, especially in some Midwestern cities like Milwaukee.

According to the report from Edmunds.com, millennials are more likely to lease vehicles than the rest of the car-buying population. It found that in 2015, leasing made up almost 29 percent of all new millennial car purchases, compared to an industry-wide lease penetration rate of 26.7 percent.

The report also finds a 46 percent increase in leasing by the age group over the last five years. In comparison, leasing among all car shoppers increased almost 42 percent over the same period.

“Leasing is a good option because it’s really an affordable way to own a car. You know, a lot of millennials still are on tight budgets,” said Jessica Caldwell, a senior analyst for Edmunds.com. “Leasing really helps you get into a car and perhaps even upgrade and get some of the amenities you wouldn’t be able to normally afford if you were going to go through a traditional purchase.”

The report also showed that leasing is a popular option for Midwestern millennials specifically. In Milwaukee, the age group is 26.4 percent more likely than the general car-shopping population to lease.

Other top markets where millennials are more likely to lease include Grand Rapids-Kalamazoo at almost 33 percent, and Minneapolis-St. Paul at almost 31 percent.

Caldwell said when the study began, they expected leasing would be popular in coastal areas like New York, Miami or Los Angeles. However, that didn’t seem to be the case: Leasing, she said, was popular inland, with a big concentration in the Midwest and especially in Michigan and Ohio.

“It’s a bit curious to why that is,” Caldwell said. “I think some of it could be because there’s so much automotive industry in those areas, especially Michigan, that people have a tendency to lease more vehicles. It seems like that would be the case given of where leasing is popular.”

Caldwell said the question of why leasing is popular in certain areas is something she’d like to explore further.