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Student Debt Contributes to Lack of Millennial Riders

Student debt has become a primary hurdle for motorcycle companies attempting to attract millennial riders to replace the baby boomers aging out of the market, according to a report from Bernstein.

Despite the fact that millennials are in one of the main buying stages of their lives — pre-family — they are only two-thirds as likely to ride a motorcycle as the older generation. One reason for this is that more young adults have college degrees than previous generations, which also means that they have more student debt.

“The average millennial has almost twice as much student debt today during their ‘pre-family’ life stage as did the average Gen Xer,” David Beckel, vice president and senior equity analyst at Bernstein, wrote in the report. “That may not sound like a large enough increase in debt to sway one from buying a motorcycle, but for the individual 20 million millennials with student debt, the difference between $15,000 and $26,000 of student debt is $130 per month, which is equivalent to a monthly loan payment on an ~$8,000 bike.”

On average, millennials have about $3,500 debt per person versus $2,000 per Gen Xer. In 2016, the average loan amount per student ranged from $36,000-$20,000, according to a report from the New York Federal Reserve. In 1990, only 50% got a loan, with the average amount borrowed being $15,000.

With few bikes costing less than $8,000, millennials interested in riding might opt for used bikes instead.

Several lenders and OEMs have enacted or made plans to attract more millennial riders. For example, MotoLease is offering a point-system program, and Harley-Davidson Inc. has made it an initiative to attract 2 million new riders in the next decade.

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As Associate Editor of Powersports Finance, Matt Wood reports on the latest developments and trends of the powersports finance world, from innovation to new partnerships. He's also a movie/TV show buff and is willing to argue about Lost anytime. Former bylines include Scout Media and CinemaBlend.

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