Apps or wheels?

In the list of essential daily items, it’s looking like the smartphone is once again on the rise, as one recent report points to a prioritization of phone payments over car loan payments.

Continue reading for the full story.

The Full Story

2013 Dodge Dart to Feature Wireless Phone Charging Interior
- image 448306
2013 Dart Charging Mat
Break it down, and it goes like this - when the hard times hit, consumers are more likely to choose a phone in their pocket over a car in the driveway.

Technology is changing at a very rapid pace, and the auto industry is undoubtedly feeling the effects - and that includes a reshuffling of consumer priorities. According to a recent report from Bloomberg, Americans are more keen to dish out money for phone payments rather than car loans, leading to speculation over consumer needs going forward.

“Payment priority of cell phones is higher than personal and auto loans and similar to or slightly lower than that of mortgage,” said Ram Ahluwalia, CEO at PeerIQ in an interview with Bloomberg. “Now with Lyft and Uber, you can access transportation via cell phone. The car no longer is a central asset. Technological change is driving shifts in consumer behavior.”

Break it down, and it goes like this - when the hard times hit, consumers are more likely to choose a phone in their pocket over a car in the driveway.

Audi's New iPhone Case Offers Wireless Charging Through Phone Box Option
- image 685195
Phones are increasingly becoming the hub by which countless activities are accomplished, from entertainment and leisure, to work and finance management, to social interaction

A report such as this would certainly seem to confirm the suspicions of critics who paint personal automobiles as less and less of a necessity. Meanwhile, phones are increasingly becoming the hub by which countless activities are accomplished, from entertainment and leisure, to work and finance management, to social interaction.

And while cars are still required by many Americans to do things like commute to work or bring home groceries, it might not stay that way for long. For example, telecommuting is on the rise, while food delivery services are also becoming more and more popular. Throw in the steady rise of ride-sharing apps and increasing costs of car ownership, and the traditional car buying model could be under siege very soon.

Of course, it bears mentioning that cars are typically much more expensive than phones, and as such, ditching the car payment is a much quicker way to ease financial burden compared to the phone alternative.

A clearer picture will be presented after additional data on phone loans is gathered. Until then, automakers will undoubtedly be feeling the heat.

Source: Bloomberg via Carscoops

What do you think?
Show Comments
Car Finder: