Study: Millennials often opt to spend tax refund on car

CARY, N.C. - 

While a large number of American tax filers were abandoned by the Internal Revenue Service’s website just hours before this year’s deadline, many Americans — including plenty of millennials — claim to have filed before the end of March.

It turns out that not only did millennials say they were filing early, but to a great degree, many say they will spend their tax refunds on updating their rides — potentially great news for dealership sales departments and service drives.

A total of 59 percent of millennials already filed as early as Feb. 26, compared to just 57 percent of all Americans, according to the eBay Tax Refund Retail Study released late last month.

Furthermore, when asked how they wish to spend their tax refund this year, the recent study found that 37 percent of millennials (who plan to spend their refund) intend to spend their tax returns on a new car, compared to just 23 percent of non-millennials.

Meanwhile, among all Americans, the top three things they plan to spend their refund on include loans or debt (34 percent), invest in my home (27 percent), and vacation (23 percent), eBay Motors vice president Todd Madeiros explained in an email interview with Auto Remarketing this month.

According to the study, most millennials want to spend their refund on themselves.

In fact, a sizable 71 percent millennials of told eBay that they are considering rewarding themselves after receiving their tax refund.

This rate is 4-percent higher than the general population.

"Our research showed that consumers, especially millennials, view tax season as a time to use their refunds to reward themselves – whether it's upgrading their personal style or investing in their passions," eBay general manager of deals Jesse Kiefer said in a news release announcing the release of the study.

Meanwhile, though most plan to spend at least part of their tax refund, more millennials do plan to save their refunds.

"Nearly 80 percent of respondents plan to spend at least part of their tax refund, however, more millennials tend to save it (27 percent) than other generations (19 percent)," Madeiros explained.

When asked to imagine having an extra 21 percent of their income as a result of no taxes, most millennials said that they would stop requesting ride-sharing services in exchange for never having to pay taxes again.

Additionally, 28 percent of millennials said they would choose to buy a new car with an added 21 percent of their income, while 31 percent claim that they would use the extra money to pay off any loans or debt.

The survey for the eBay Tax Refund Retail Study was conducted with a sample of 1,000 people in February. Millennials are defined as respondents between 18 to 34 years of age.

Editor's note: Corrected and edited for clarity on numbers. 

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