Millennials Expected to Lead Car Ownership Boom
Millennials (people born between 1981-1996) have been slower than other generations to embrace what are typically important stages of American life, from driving a car, marriage, purchasing a home and car, and starting a family. Compared to other generations, millennials were not as excited about cars. Only 44 percent of millennials obtained a driver license within 12 months of the minimum age, and 28 percent had not received a driver license by age 18. Instead, millennials embraced the sharing economy, preferring ride sharing, Lyft and Uber, bike sharing. This seems to have changed.
“Millennials are taking over the industry,” says Tyson Jominy, VP of Data & Analytics at J.D. Power. In a May article for Insider Radio, Jominy indicated vehicle purchases by millennials year-to-date in 2021 exceeded that of baby boomers for the first time ever, increasing 24 percent over the same period in 2019. Millennials had bought 1.55 million vehicles in 2021 so far, surpassing boomers whose sales were 1.41 million. Jominy said this marks the first generational shift since boomers grew into car buying age in the 1960s and dominated auto sales since.
No doubt the pandemic has made ride sharing less attractive for this generation. According to Max
Digital, 34 percent of millennials intend to purchase a vehicle in the next 12 months. Since they make up the largest generation since the baby boomers, numbering about 75 million, as millennials advance their careers and start families, they will continue to become a very important car-buying group. Their preferences can help dealers respond better in customer service, marketing and sales.
Here are some millennial car buying trends from a CDK Global study:
- 60 percent of millennials say they intend to keep their current vehicle less than five years, compared to 35 percent of Generation X and only 20 percent of baby boomers.
- 85 percent of millennials access the internet via their mobile devices and use smartphones more often in the car-buying process.
- Millennials are digital natives. Nearly 75 percent say technology – including navigation, Bluetooth connection, safety and phone connectivity – are must-have features in their vehicles.
- Convenience is the top car-buying motivator. Younger millennials (18-25), especially males, are also especially motivated by the social status of having a car, while nearly 3 out of 4 older millennials (26-36), said a lifestyle change motivated them to get a new vehicle, i.e., moving for a job, starting a family, or getting a dog, so different vehicle features are important.
- Millennials use cost-benefit comparisons to make their final selection. They are money conscious and want to get the most value for their dollar.
- Less than half of millennials agreed said conversations with the salesperson influenced the finalization process; however, millennial women were more likely than their male counterparts to say the salesperson was an influencer.
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