Car Ownership Drives the American Dream

President of Financial Services at Capital One Sanjiv Yajnik shares one key to more economic opportunity is owning a car

Editor's note: This story was written by Sanjiv Yajnik, President of Financial Services at Capital One.

A car is more than a mode of transportation. For many people, an emotional connection to cars starts at a young age. Kids draw pictures of cars and pretend to be behind the wheel. Teenagers can’t wait for their 16th birthday to get their license. Many adults talk about the cars they would love to own one day and reminisce about childhood memories of family road trips.

Simply put, people of all ages dream about cars.

In addition to the emotional draw of cars, owning a vehicle is connected to practically all  aspects of a person’s life, whether current or aspirational: living where they want to live, easily getting to work or school, and earning enough to raise their families. In Capital One’s most recent Car Buying Outlook study, 87% of car buyers agreed that owning a car opens up more opportunities. 

However, very few people can achieve their car ownership dream by casually walking into the dealership and picking from the brand new models on the showroom floor. For most Americans, the affordability of used cars is the way to ease into ownership.

Whether new or used, a critical factor for many car buyers is financing. One survey found that more than four out of five people say they need financing to buy a car. Our auto business works to provide access to car ownership to more people so they can pursue their dreams. We have leveraged our technology prowess, and worked alongside dealers and consumers to create a simpler, dynamic and more transparent car buying process. 

Embracing New Roads to Car Buying

Through the pandemic, consumers accelerated their use of digital tools to enhance their buying process for anything they could—from small purchases like groceries, to large purchases like cars and homes. However, in the car buying journey, something very interesting has happened.

First, dealers rapidly embraced digitization, anticipating the increased need for their customers to access more information online, particularly in the early months of the pandemic when car buyers were prevented from shopping in person for periods of time. Dealers invested in innovation and technology, took new strides toward creating digital tools, and opened more of the shopping experience to be remote. That may have contributed to the 40% of car buyers who reported the process as transparent in 2021.

On the other hand, car buyers grew accustomed to using highly sophisticated and transparent digital tools in many other aspects of their online shopping experiences, and the car buying process has not yet met the same level of innovation. This may be why in our latest survey, the number of car buyers who view the process as transparent declined to about one in four, and only 3% of buyers say they are most comfortable purchasing a vehicle completely online. Many people clearly desire the in-person experience when making significant life purchases, often seeking a consultant to help guide them in the process—and remember, a large majority need financing to do so.  

To make these customers feel more comfortable, dealers must make the jump to provide excellent and consistent online and in-person experiences. By offering straightforward, digital resources that buyers can access early in their car buying journey, dealers can deliver an amazing, seamless experience once they arrive at the dealership.   

At Capital One, we recognized this need. We have spent many years transforming our suite of technology products to create modernized, digitized solutions that help both car buyers and dealers. We are proud of the progress we’ve made, and continue to innovate and serve our customers in the channels they wish to use.  

Keys to The Future

Today, perhaps more than ever, car ownership means freedom—of how you spend your time, where you call home and where you work. Spurred in large part by the pandemic, people have relocated from urban areas to suburban and rural areas. In our March 2022 survey, 42 percent of car buyers said they’d recently moved away from urban areas, or that they plan to. But to make it happen, they need access to reliable and affordable transportation or access to a private vehicle. 

Across these three areas, owning a car is closely tied to helping to improve the quality of their life:

  • For those who still live close to urban areas, many cities have made large investments to provide needed infrastructure in the form of public transportation. However, averaged across all households, commuting to work takes over twice as long on public transit as commuting by private vehicle.  That time is a precious resource people can use to make meaningful progress against their goals and top priorities, including being present with their families. 
  • Furthermore, families with access to cars are more empowered to choose where they want to live. 
  • In addition, car owners are twice as likely to get a job and four times as likely to keep it than non-owners—and they earn three times as much on average. In fact, 84 percent of low to moderate income earners have had to turn down a job opportunity due to lack of car ownership.  

One of the keys to unlocking some of these opportunities, including those listed above, is to find the right financing and buying options that work for each individual. This is one large purchase in life where emotion and opportunity point in the same direction, and financing makes it all come together.

A Shared Destination

It’s a tired cliché that car dealers and their customers are at odds with one another because, the truth is, high-quality dealers want to work toward a shared goal and thrive with their customers. Let’s remember too that quality dealers are essential, entrepreneurial pillars of their communities who often give back in amazing ways. 

We must acknowledge that many car buyers continue to value the in-person experience at a dealership. The easier we make it for people to approach that process with information and options, the more who can realize the dream of car ownership and everything it unlocks.

I’m incredibly proud of how we have leveraged our suite of technology products and deep understanding of the car buying process to help our customers find the cars and financing options that work for them—and there are big opportunities to do even more. With the rapidly evolving nature of the auto industry, institutions like Capital One are uniquely positioned to do the right thing to help both dealers and their customers create a more transparent system so that our societies continue to flourish. 

Lower-middle income respondents are classified as those who self-report greater than $25,000 but less than $50,000 annual household income

Sanjiv Yajnik, President, Financial Services, Capital One

As President of Financial Services, Sanjiv Yajnik has spent the last 20+ years living out Capital One’s vision to dream, disrupt and deliver a better way through overseeing the company's Auto Finance business. He is a firm believer in combining customer-back design, technology and innovative operational structures to unleash success.

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