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Millennial car buyers accounted for $4 million in U.S. sales last year — but are you prepared to sell to them?
Every new generation is different, and as each one comes of age, older generations struggle to understand these individuals who will eventually run the country one day. One of the most polarizing generations is having their moment right now: the Millennials.
Who are these elusive Millennials? Experts can’t seem to agree on a specific range of birth years they fall into, but Pew Research Center narrows it down to anyone between the ages of 18-34 in 2015; that would mean everyone born between 1981 and 1997. Pew also notes that according to data released by the U.S. Census Bureau in April of 2016, millennials have now surpassed Baby Boomers as the nation’s largest living generation.
Needless to say, there’s a lot of money to be made off of Millennials who walk into your dealership looking for a vehicle. We’re not in the 2008 recession anymore, so you can shelve all of those previous worries you may have had about Millennial car buyers. They are real, they exist, and they’re ready to buy from you — it just took them a little longer to get there.
What drives Millennial car buyers
There’s been lots of uncertainty in the auto industry when it comes to Millennial car buyers. The recession happened, young people weren’t buying vehicles, and some dealership owners were sure the end of the world was near. Yes, the economic downturn certainly had an effect on the purchasing trends of Millennials, but there’s more to the story.
The age range for millennials is quite large, and they’re all at different stages in their lives. Younger Millennials may be fresh out of high school, while older ones are settling down and starting families. There’s also been a general decline in the amount of young people getting their driver’s licenses.
A University of Michigan study showed that 87 percent of 19-year-olds had a license in 1983, compared to 69 percent in 2010. Why? Millennials said they were too busy to get licenses and were okay with asking other people for rides. This generation also takes advantage of new transportation options, like Uber and ZipCar.
What is it that prompts Millennial car buyers to visit a dealership? Auto Trader’s study, The Next Generation Car Buyer, says that Millennials usually buy vehicles out of necessity rather than want. Lifestyle changes are the biggest drivers and include having kids, getting married, buying a home, graduating college, or getting a job.
Remember, many of these Millennials entered the workforce during the recession, saddled with student loans they needed to pay off. They are much more intentional about their purchases, and while they may want a car, they usually won’t buy until they need one.
How to sell to more Millennial car buyers
According to J.D. Power’s Power Information Network, Millennials were only behind Baby Boomers in the amount of cars and trucks purchased in 2015; in California (the country’s biggest car market), Millennials were number one. There’s a lot of sales to be made to Millennials in the auto industry, and now that you understand what’s driving them, you need to know what they want.
Auto Trader’s study notes that Millennials are optimistic and they value individualism. They genuinely trust the experience of others and are tech savvy and hyper-connected. What does this mean for your sales approach?
Though Millennials came of age during the recession, they’re still optimistic about their personal situation and believe they will ultimately be better off than their parents. Translation: they want to buy, and they’re willing to work hard to get the money to do so.
Millennials like to impress people and show off their style. Though they’re probably coming to buy a car out of necessity, that doesn’t mean they aren’t going to want all the bells and whistles too.
They’re big on word-of-mouth referrals, and they rely on reading customer reviews. Make sure your reputation, both online and off, is up to snuff.
83% of Millennials sleep with their mobile device and 80% texted in the past 24 hours. Your dealership needs a solid mobile strategy to stay connected to Millennials.
The types of cars you sell Millennial car buyers will naturally vary depending on individual needs, but a recent list from Forbes can give you an idea of what they’re looking for:
Acura ILX sedan is the most popular luxury sub-compact among Millennials.
Subaru WRX has the highest mix of Millennial car buyers, overall.
Dodge had the largest share of retail registrations as a percentage of sales among Millennial buyers in 2015. Mitsubishi, Mazda, Volkswagen, and Jeep followed.
“Millennial” doesn’t have to be a dirty word in the auto industry anymore. As the generation continues to age, you’ll see more and more seeking your services — so learn what they want, and be ready.