When a millennial steps onto your lot, chances are that they are ready to buy. In fact 48% of 17 to 24-year-olds intend to buy a car on their first visit to a dealership according to research by Auto Trader. They have done their research and know what type of car they want, although according to the research, nearly half are open to purchasing either a new or pre-owned model.
With millennials expecting to drive off the dealer lot in a newly purchased vehicle, dealerships need to keep some key considerations in mind:
FICO recently conducted a survey that took a deeper look into millennial car buying habits. The survey asked respondents about their finance options. 19% of respondents said they would buy a new automobile with a credit card even if it meant paying high interest rates. An additional 20% said they would prefer to finance a car through a dealer, 27% would use banks and credit unions, and 34% would prefer to use cash.
Millennials still prefer to purchase a vehicle at a dealership, although online channels are gaining in popularity. FICO’s research indicated that 82% of millennials prefer a dealership, but they are more likely to consider other online channels as compared to any other age group. 59% of millennials would consider buying a vehicle from another consumer on sites such as AutoTrader, Craigslist, and eBay.
Not long ago, the auto industry was up in arms, not sure what to expect from this younger generation of car consumers as they delayed car buying in favor of transportation choices such as Uber and ZipCar. However, with this generation entering into the workforce, millennials are now buying cars in large numbers. The FICO survey indicated that 91% of Millennials prefer vehicles for commutes and recreational purposes. Millennials bought 4 million cars and trucks in the U.S. last year, second only to the baby boomers, according to J.D. Power’s Power Information Network. Millennials’ share of the new car market is at 28 percent and in California, the country’s biggest car market, millennials have now outpaced boomers for the first time.
This is a generation that is poised to quickly grow in car ownership. With older millennials having entered the job market and gaining economic stability, 84% of these older millennials own a car. Approximately half of younger millennials don’t currently own a car but 73% stated they intend to purchase a car within a year or more(Autotrader.com).
Millennials see their car as playing a key role in staying connected and 72% indicated that a vehicle is important to their social life. As far as connected features that they most desire, the top rated features include:
According to AutoTrader’s research, “They spend over 17 hours researching their vehicle before purchase, and 71% say they need to be aware of all possible vehicle choices – more than Gen Xers or Baby Boomers. While friends and family largely influence their purchase decision, the Internet is even more influential, with third-party sites being the top source for 82% of Millennials shopping online. Not surprisingly, Millennials are more likely than any other generation to use mobile devices. Already, 45% use a tablet or smartphone during the car-shopping process.”
With online channels being such an important factor in the research stages, automotive marketers must be extra diligent in ensuring these channels are optimized for personalized engagement. Be sure to share plenty of content – both informative and interactive – across various sites. Focus areas should include your website, social networks, videos on YouTube, real-time updates and transparency into inventory, online forms to capture a prospect’s information, an easy interface for consumers to engage with a sales rep online, and integration with third-party review sites. Remember, a millennial won’t even consider walking onto your lot unless you can create brand awareness and promote a positive online experience.
Millennials also tend to be mobile-first consumers. In fact, 48% of mobile-first auto consumers are Millennials. Websites, email communications, online contact forms, and any other piece of content to promote your brand and dealership absolutely must be optimized for mobile users. A poor mobile experience can turn shoppers away quickly. According to a 2015 CDK Global report, “A majority of Millennials said they wouldn’t wait more than five seconds for a page to load on a mobile device. In addition to slow load times, lack of mobile optimization, interactive features, and quality photos were the top complaints about mobile shopping. Essentially, Millennial shoppers expect to get the same quality shopping experience no matter what device they are using.”
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