Gen Z are the most likely to pay for their car in cash

And their Gen X parents are the most likely to finance

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Susan Meyer

Senior Editorial Manager

  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

Recent polls by the University of Michigan show that a record number of consumers believe it’s a bad time to buy a car. 

Who can blame them? The auto market is still reeling from a global pandemic and accompanying supply chain issues that have sent car prices for both new and used vehicles through the roof. Kelley Blue Book estimates the average used car sells for 42% more than it did prior to the pandemic. 

The global chip shortage also means new cars are harder to find — and in particular the kinds of cars many shoppers are looking for. Automakers are currently prioritizing luxury vehicles over entry-level sedans and crossover SUVs to get the most return for their investment on limited chips. 

But even in the face of terrible competition and rising prices, sometimes you still need a car. As part of a larger survey, The Zebra recently asked consumers how they financed their most recent vehicle and learned it varies a lot across generations.

Half of Americans purchased their most recent car through financing

How did you acquire your last vehicle_

Across all respondents, 1 out of 2 purchased their most recent vehicle through an auto loan. Auto loans are the third largest consumer credit market in the United States, and Americans currently have a total of $1.4 trillion in outstanding auto debt. This is double the amount of loan debt 10 years ago, and it’s only expected to increase in the future along with rising auto prices. 

While half of respondents financed, a significant portion of Americans (38%) purchased their most recent vehicle in cash. The remaining respondents either leased their vehicle (7%) or received it as a gift (5%).

Gen Z is the most likely to pay cash

When we break down the data by generation, there are some stark differences in how people are buying cars. Members of Gen Z (those born between 1995 and 2015) are the most likely to pay in cash by a wide margin (45% of respondents). In fact, the majority of Gen Z acquired their last vehicle through cash or a gift. They were also by far the least likely to finance a car.

Gen Z is often characterized as preferring cash and being leery of credit cards and assuming debt, so in many ways this makes sense that it would carry over even to large purchases like vehicles. This younger generation understandably has less overall purchasing power, so they are seeking out less expensive vehicles. One source found that the average value of vehicle Gen Z was interested in was $19,800 — about half the value of their Gen X parents’ cars.

How Different Generations Acquired Vehicles


Gen X is the most likely to finance a vehicle

By contrast, Gen X was far likelier to finance a car with 58% of respondents having done so to acquire their most recent vehicle. Gen X and Boomers also were both less likely to have received their vehicle as a gift or to have leased it. 

Gen X has more purchasing power than Gen Z or Millennials; however, they also have higher credit scores and are less credit averse than younger generations.

Wrapping up

As buying a car becomes a weightier decision with climbing prices and steep competition, it’s interesting to see how different generations approach buying their next vehicle. 

And as the market shows no signs of becoming friendlier to car buyers, it will be interesting to see how Americans continue to find the resources to pay for necessary transportation.


The Zebra conducted a consumer survey with panel provider Maru Blue from January-February 2022. The general population sample size was 1,200 and the by generation sample was 1,848. 

All participants had to be over 18 years of age, be a licensed driver and must have previously acquired a vehicle (cash, financing, lease, gift all satisfy).