Posted by Brandon Weaver on Fri, Nov 02, 2012 @ 10:00 AM
Get ready: Millennials are the next generation of car buyers. By 2025 this generation is expected to account for 75% of all vehicles purchased. Being prepared to meet their needs could mean a lot of opportunity for your dealership, and a lot of sold inventory. They come armed with research, know what they want and don't want to haggle. What other challenges does this generation present?
- High unemployment rates among this group mean less discretionary income to spend on new cars
- Rising gas prices impact their choice of vehicles
- Ecological concerns mean they place value on fuel conservation as much as style
- They're wired, they want their vehicle to be wired, too
To overcome these obstacles auto dealer general managers must be forward-thinking and anticipate challenges, especially with the need to replace old inventory with newer 2013 models.
Millennials, also called "Generation Y", are generally referred to as people between the ages of 18-34. Depending on the source, this generation is either buying new cars in increasing numbers or substituting technology for cars when it comes to status. USA Today reports new car buying is rising after years of decline. One reason, they note, is because "high used car values could be helping young buyers who have something to trade-in or sell." College graduates with older cars and entry level jobs may be enticed to trade-in their old vehicle knowing they can get a good deal. Furthermore, graduates that move to new cities and want the freedom of personal transportation will be even more enticed to trade-in and get new wheels.
On the other hand, owning a new car is not as big a status symbol for this generation as it was in the past according to a story in Time Business & Money. Millennials don't have to jump in their car to meet and connect with people, they now do it online. Being heavily connected, many see more value in smartphones and laptops than a fancy new car or truck. For them it is easier to justify paying up to $500 for a smartphone and $100 for monthly service, as opposed to a couple thousand dollars as down payment and $300-$500 for monthly payments on a new vehicle.
With younger crowds becoming more tech savvy car manufacturers have stepped up the game when it comes to appealing to this group. Millennials are still creating their own identity, so they want something different than what their parents owned. Forget minivans and suburbans, they want sporty cars or, for the more practical and eco-conscious, hybrids. More and more vehicles now come equipped with bluetooth capabilities, are iPhone compatible, have touch screen and GPS navigation--definitely not your father's Oldsmobile.
Time Business & Money states that industry experts agree that Millennials are auto industry game changers. Growing up in the information age they shop for vehicles armed with plenty of product knowledge and do not want to haggle on price or be upsold. They are used to quick and easy transactions and prefer not to waste time during the process. Carrying debt from college, this generation is hesitant to accumulate even more by placing down payments on credit.
With that in mind, work to provide a Millennial-friendly buying experience. Show off the techy features, stock up on dual fuel or hybrid vehicles and make pricing easy and haggle-free. Consider offering a Multiple Check program for those reluctant to take on additional debt.
By welcoming the next generation of car buyers to your showroom, you could be creating lasting relationships that turn into repeat customers for years to come.
Tags: Auto Dealerships