Move cars off the lot faster than you can drive them
America’s largest generation is finally buying cars, and now it’s time to fully understand Millennial car buying habits so you can get a piece of the pie.
Were you working in an auto dealership around 2009? If so, you probably remember the underlying fear that the industry was never going to bounce back after the Great Recession, thanks to the buying habits—or lack thereof—of Millennials. Just saying the word “Millennial” was enough to make every salesperson in your dealership break into a cold sweat.
Hopefully, by now, you and your colleagues have realized that Millennial car buying habits are not the crushing dilemma they once were. After all, according to J.D. Power’s Power Information Network, those young people bought 4 million cars and trucks in the U.S. in 2015.
Millennials are the generation born between 1981 and 1997, and as of April 2016, they’re also America’s largest living generation. Individuals who are currently in their 20s to mid-30s are spending plenty of money buying cars. You just need to understand Millennial car buying habits and then adjust your sales and marketing tactics accordingly.
The 8 Millennial car buying habits you simply can’t ignore
1. They’re delaying—but not forgoing—car ownership.
This isn’t the generation that came into your dealership with their parents to look for reliable used vehicles when they turned 16. But what about after college graduation, around age 21 or 22, when they were entering the “real world”? Nope, not then, either. Millennials put off buying cars for several different reasons—crippling student loan debt, high rates of unemployment, and the ease of Uber—but they haven’t written it off entirely. As they grow up, save money, and move to the suburbs, you’ll start to see them more and more in your dealership.
2. They invest more time in the overall car-buying process.
Younger generations are often labeled impulsive or reckless, but when it comes to Millennial car buying habits, that’s simply not the case. In fact, they take longer to make a decision about a car than those in the Baby Boomer generation. Speakers at the 2016 J.D. Power Automotive Marketing Roundtable revealed that Millennials take longer than Baby Boomers to decide which car to buy—16.9 weeks vs. 15.7 weeks. And during the buying process, Millennials invest about 4.5 hours more, overall.
3. They demand a positive online experience.
If you’re only focused on the in-dealership experience for customers (which is certainly important), you’re probably missing out on a big chunk of the Millennial market. These buyers grew up online, and before they buy, they’re checking your dealership’s digital footprint from head to toe—your website, social media presence, YouTube videos—and they’re judging how fast you respond to comments or questions, and what your tone is.
4. They know what they want.
Don’t talk down to a Millennial or push them into a car they don’t want. According to Auto Trader’s research, they spend 17 hours researching a vehicle before purchasing, and 71% need to be aware of all possible vehicle choices. Stay on top of your inventory so you’ll be sure to have what they’re looking for—if not, they’ll be happy to go somewhere else.
5. They’re attached to their phones.
What type of mobile experience does your dealership provide? 45% of Millennials report doing most of their vehicle research on a mobile device, and they want the same quality experience as if they were using a desktop computer. Take the time to do some quality control and verify that your dealership’s mobile website is up to snuff.
6. They’re not about flashy cars.
When Millennials finally decide to buy a vehicle, they usually aren’t looking for anything extravagant; they value reliability and practicality.
“I see a lot of people my age have affordable, reliable cars,” said Branden Matlock, a 32-year-old real estate agent in San Diego, speaking with the Los Angeles Times. “I bought my Prius because I wanted to get great gas mileage.”
7. They want to stay connected in their car.
Remember how Millennials don’t want flashy cars? That doesn’t mean they aren’t looking for the latest in technology. Millennials want to stay connected in their vehicles and see technology not necessarily as a nice “extra,” but essential and practical features in their daily lives. Learn all of the tech features—navigation systems, satellite radios, Bluetooth, and mobile integration—to impress your Millennial car buyers.
8. They hate the financing process.
Don’t lose your customer in a pile of slow-moving paperwork. Streamline the process as much as possible.
“Of all the age groups, Millennials are more likely to say they find the car buying process boring, confusing, and complicated, and least likely to say they find it exciting, fun, and interesting,” said Nick King, Auto Trader Insight Director.
Millennials are smart, they know what they want, and they’re willing to invest the time and effort to find it. That means if your dealership isn’t creating memorable, positive experiences both online and off, and stocking the vehicles Millennials are looking for, you can’t be surprised when they start taking their business elsewhere.