Millennials Buying Used Cars
SEE ALSO: Used Car Super Search
Forget what you think you know about millennials* and their relationship with automobiles. Fears that Gen Y — those between 25 and 42 years of age today — would turn their backs on the all-American car-buying tradition are unfounded.To be sure, there was some initial cause for concern. As this demographic came of age at the end of the last decade, the Great Recession dampened the economic outlook. Jobs were scarce as their first student-loan payments came due. This, coupled with the unexpectedly rapid rise of ridesharing services like Uber and Lyft and alternative car-share business models like Zipcar, prompted many pundits to pronounce the death of conventional car ownership with this generation.
Not only are millennials buying, they are buying big. A strong economy with low unemployment has provided this generation with the confidence to enter the market in large numbers. J.D. Power research shows that millennials are the driving force behind the used-car market. Gen Y consumers are buying 1.5 times more used vehicles today than consumers of the same age did six years ago.
And what are they buying? Not the fuel-efficient sedans or coupes one might expect.
Connecting with the Gen Y consumer
The one broad assumption — or stereotype — about this generation that has held true is that millennials do love their technology.
Compared with other demographic segments, millennials are more interested in vehicles that can absorb and extend their online lives when they are on the go. Vehicle brands that deliver on this digital desire tend to do better with millennials than those brands that have not carefully thought about how to seamlessly integrate mobile devices and apps into the driving experience.
The high-tech pre-disposition of Gen Y has also influenced how this segment shops for — and ultimately purchases — vehicles. For this reason, the online presence of both manufacturers and dealerships plays an increasingly important role in the buying journey of millennials.
J.D. Power research verifies what most of us already suspected: Consumers in this age group are most likely to first become aware of the makes and models they end up purchasing on websites and mobile apps.
What is interesting, however, is that they don’t typically finish online. While nearly every millennial starts the buying journey digitally, Gen Y shoppers mostly like to close the deal at the dealership.
This is terrific news for dealerships, especially those that want to connect the dots between the online and onsite buying experience — and who want to build a relationship with their customers. Dealers who succeed in building that relationship will be the ones who pay close attention to how younger generations do their shopping.
Maya Ivanova is senior quantitative researcher at J.D. Power.
* J.D. Power defines generational groups as pre-boomers (born before 1946); boomers (1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z (1995-2004). Millennials (1982-1994) are a subset of Gen Y.