Everyone claims to have millennials figured out. Except when they don’t.
I think it’s safe to assume the only people who have millennials figured out are themselves. They don’t like to be told how to think or what is expected of them. They make decisions when they are good and ready. That’s not a criticism. They’re just being prudent.
This is absolutely true when it comes to car buying. For a while now, many assumed millennials would not be car buyers, let alone enthusiasts.
But TransUnion did some digging recently and found millennials make up over 25% of auto loan originations and by 2020, they’re buying power is only expected to increase as they will account for 40% of all new cars sold.
Autotrader published a study where they interviewed about 1,900 new and used car buyers and discovered a few insights about what is shaping car buying for millennials. In a nutshell, this is what they found.
- Smaller is better.
Millennials are influenced by smaller, more affordable cars. Cars like these are more fuel efficient and easier to drive in the urban settings they prefer. They also like the idea of electric and hybrid cars but in some cases, these vehicles are out of their price range. College debt is to blame here and takes precedence over a more expensive car.
- Automotive blogs and social media play a role.
But not an overwhelming one. Forbes and Elite Daily found that millennials only utilize about 3% of traditional media when car shopping. They have moved online to search social media and blogs looking for honest reviews of cars they are interested in. As you would expect, 95% of millennials looked online at some point during their car buying process. But only 5% are actually influenced by what they find on sites such as Facebook and Twitter.
- Forget the sales pitch.
Millennials appreciate experts who can help answer questions but dealers should leave the high pressure sales tactics behind. Young buyers want to consider all of the options so they may take longer making a decision.
- Treat them well.
Millennials want to be considered a valued customer and feel in control during the buying process. They also like transparency. Treat them fairly and make sure all costs are upfront.
- Offer variety.
As they always say, variety is the spice of life. Not only with new cars but used as well. Since millennials are budget conscience, used cars are not out of the question, as long as it meets their criteria. And as part of the transparency they prefer, make sure the any car’s vehicle history is close at hand.
Millennials aren’t the only generation spending less on cars. In recent years, everyone has reduced their car budgets. The buying public hasn’t stopped buying cars, which is evident by car sales breaking records. They’re just spending less.
As an example, small SUVs experienced high sales volume last year. But that can probably be attributed to the practicality millennials appreciate in their cars.
But they also want the cars they buy to reflect sophistication, innovation and be stylish. So cars like these are definitely out. Which is why technology in their cars is so important. Connectivity? Better have it. Room for friends and carpooling? You bet. But the carmakers they choose better be investing in electric and hybrid models as well as autonomous driving. Millennials are impressed by brands that are forward thinking.
Millennials influence will continue to grow. Their taste in cars will most likely remain consistent but as their income grows, they will happily pay more as long as the car reflects their values. Many brands are looking to influence millennials but the successful ones will provide the hook that makes them stay.