Say what you will about the millennial generation, but they’re on the cusp of dominating the workforce. According to the recent Deloitte Millennial Survey, those born after 1982 are going to make up three-quarters of the global workforce by 2025.
So essentially, they’re the next big market that might be looking at a novated lease to secure a vehicle. But how do they actually feel about that?
Hesitant to buy?
Goldman Sachs has also dipped its toes into the millennial survey market, with its 2016 ‘Coming of Age’ report. In it, the company noted that millennials tend to be less inclined to make big purchases – including when it comes to cars.
This generation will be more inclined towards shared ownership of vehicles.
Jeremy Rifkin, an economist with Goldman Sachs, thinks that in 25 years this generation will be more inclined towards shared ownership of vehicles, rather than owning one outright. Of course, if it’s the finance side of things that is pushing young people this way, maybe they just need to learn a bit more about novated leasing. After all, the tax benefits and smooth payments could be just what this driver group needs.
Crucial for some
The Goldman Sachs data broke down millennials a little further, separating those that were definitely going to be buying a car from those putting that decision off until further down the line.
- 15 per cent of respondents thought it was “extremely important” to own a car
- 30 per cent didn’t intend to buy one in the near future
- 25 per cent would buy one if they really needed it, but were otherwise fairly apathetic
So clearly, the global attitude isn’t one that’s leaping to buy a new car. Could things be different here?
Despite that somewhat negative outlook globally, car registrations are still on the up in Australia. The 2015 motor vehicle census from the Australian Bureau of Statistics recorded more than 18 million vehicles registered – a 2 per cent increase on the year before. As of this report, we had 764 vehicles for every 1,000 people.
In particular, light vehicles and motorcycles (including scooters) were popular options.
No matter what the prevailing attitude is among the generation set to dominate the workforce and the general landscape, a lot of people are going to need cars. That’s where understanding how a novated lease works can prove essential, especially for those that need smooth, low-cost options.
A novated lease lets people pay for a vehicle over a set term, avoiding taxes like GST, and rolling all associated costs into one payment. For more information on how it works, no matter what age you are, get in touch with Alliance Leasing!