When I turned 16, I got my first car. It was well past its prime, barely ran and was of a questionable safety level but it was $500 and it was mine. I toiled away for two summers at a hot dog wagon off of the side of the highway to earn enough money for it and the insurance to get me on the road. I would have never dreamed of registering for the car and having my friends, families or anyone I could reach via the internet to finance that car for me. Fast forward twenty years to today where the millennial generation and car companies are coming up with ways to finance their first new car.
Today’s teens and college students are using technology to finance their first cars the same way that many artists and creatives are using to get their projects off the ground – through crowd funding and social media.
What is Crowdfunding?
Crowd funding is the collective efforts of individuals who pool their money to support the efforts of others. Crowd funding platforms like Indiegogo have helped people to fund projects, raise funds for charity, start businesses and even raise money for medical procedures. Anyone can create a page and then publicize it via social media to gain donations from friends and family. Raising $2000 (or whatever amount) from one source can be difficult but getting $20 from a hundred sources may be much easier. If it works for funding these projects, why not use the concept in getting your first car?
Crowd Funding Cars and How it Works
Hyundai and Chrysler are the two pioneers in crowd funding for cars. Although they use two different models and have had varying results, it certainly has created a lot of buzz and hope in young people everywhere. The reality? Hyundai has seen 1700 car sales as a direct result of the program while Chrysler’s Dodge Dart funding has only seen 2.
Hyundai allows people to register through a third party. They offered a special bonus for those taking part by matching dollar for dollar up to $500 for the down payment of a new Hyundai. Chrysler used the crowd funding concept by allowing people to pay for components of their new Dodge Dart. The person can register and have Aunt Judy buy a headlight or their parents pay for the stereo.
This could be an interesting way for your teen or college student to get a new car. Instead of buying it for them, you can use their tech savvy and motivation to find ways to fund their vehicle. Parents can get involved and choose to match contributions. If they raise $1000 you will match it or give them a goal to hit before you will help them out.
When you really think about crowd funding for cars, it’s not really that different than our generation saving our graduation and birthday money from grandma, begging our parents and slaving away at summer jobs to buy our first cars. We just didn’t have the internet to help us out in our endeavors. Will you let your kids use crowd funding to finance their first cars? Let us know what you think in the comments below!