How Millennial Car Buyers Are Impacting the Auto Industry (Bridgewater Car Dealers Share Gen Y Car Buying Trends)
What this shows is that, despite frequently using ride-sharing services and getting driver’s licenses later than previous generations, millennial’s still buy cars. And, as millennial’s get older, earn more, and start families, we can expect more car purchases.
However, that’s not to say they hold the same car buying views as their parents or grandparents. From the eco-friendly auto shift to utilizing more technology in the buying process, read on to find out how the fastest growing segment of car buyers are impacting the auto industry: Bridgewater car dealers share Gen Y car buying trends.
#1. Fewer Driver’s Licenses Doesn’t Mean Fewer Auto Sales
According to a survey, over the last 30 years, fewer American teens and young adults are getting their drivers licenses. Specifically, from 1983 to 2014, the number of 16-year-olds with driver’s licenses decreased by a whopping 47%. Although the figures aren’t as startling for twenty- and thirty-somethings (Americans ages 20-24 and 30-34 with licenses decline 16% and 10%), the trend still continues.
You can bet the auto industry was panicking with statistics like this, especially combined with the ride-sharing craze. However, it’s not that millennials have turned away from the car buying market but, like getting married and starting a family, have delayed it.
Now that millennial’s are getting older, we see them inch into the car buying market—(where baby boomers still dominate) and purchase more cars than Gen Xers last year (as mentioned).
#2. Fewer Cars Purchased in a Lifetime
Because millennials are slower than past generations to buy a car, they’ll potentially own less than 13 cars in their lifetime— the number of cars the average person had (pre-recession)over the course of their life.
To be fair, we can also attribute this to better car technology, where some makes and models can now easily go past the 200,000-mile mark, even making it in some cases to 300,000.
#3. Viewing Cars Differently Than Their Parents and Grandparents
Perhaps one of the reasons why millennial’s aren’t jumping right away to purchase a car, let alone get a driver’s license comes down to how they perceive cars?
This difference in thinking may be why Gen Xers and baby boomers were more insistent to get a license and buy a car versus millennial’s—as more than one-third (37%) gave “too busy” and 32% listed “cost of owning and maintaining a vehicle” as their main reasons for not getting a license.
Practicality could also be why some millennial’s buy a car when they move away from the city to the more affordable suburbs. Not being as centrally located to the grocery store and shopping mall, not to mention a transit station or subway could force them to start the car buying process.
And then you have to consider other practical matters like having a mode of transportation for your children and wanting to expand your social circle in neighboring cities, and it makes sense why, out of necessity, slightly over one-quarter of last year’s new cars sales were from Gen Yers—especially when a majority of millennial’s are now in adulthood and are entering a new stage of life.
#4. Expect to See More Eco-Friendly Cars
Now that more millennial’s are starting to purchase cars, don’t be surprised to see a surge in fuel efficient, Eco-friendly vehicles. Millennial stake environmental conservation seriously; many want to purchase vehicles that support this cause.
This Eco-friendly auto shift won’t just happen in the U.S. but around the world. In fact, a Nissan Europe survey showed that slightly more than three-quarters of millennial’s considered a green car as the best action toward a more sustainable future.
#5. Compact Cars Will Be in Demand
Millennial’s are also drawn to small, compact cars not just because they usually tend to be fuel-efficient and Eco-friendly but many are affordable.
The typical price for a compact car usually falls under $18,000. However, with automatic transmission and other upgrades, the sticker price will be around the $20,000-dollar mark. Even including the upgrades, compact cars are cheaper than your average midsized sedan, which is priced around $25,000.
Also, compact cars are easier to park, which is a plus for the many millennial’s who live in urban cities and want a car that is easy parallel park in tight spaces.
Don’t Discount Ride-Sharing Services
However, let’s not forget that city-dwelling millennial’s like ride-sharing services, some even preferring it over car ownership. This makes sense given that convenient parking in a bustling metropolitan city is hard to find and, at times, can be a hassle. And then there are parking permits and public parking fees to consider too.
Even though, in some areas ride-sharing services give automakers a run for their money, like we said earlier, millennial’s will probably depend more on cars once they move to the surrounding (and more affordable) suburbs and start a family.
#6. More Technology Used in the Car Buying Process
It goes without saying that millennial’s are extremely tech-savvy. Case in point, 80% have texted within the last hour and 83% even sleep with their phones. So, it’s no wonder that millennial’s also rely on technology when it comes to purchasing their car.
In fact, millennial’s research potential vehicles for over 17 hours, wanting to know more than other generations all of their vehicle options.
As more millennial’s purchase vehicles, it will be interesting to see if their research pays off at the negotiation table and they’re able to secure a better car deal.
Final Thoughts: What Bridgewater Car Dealers Has to Say
Millennial’s are becoming the car buying force to reckon with. Not even at their purchasing peak, they’ve already started to make a dent in the auto industry, with more eco-friendly and compact cars coming out in the near future. Although millennial’s are the generation ridden with college debt (which may have helped put buying that new car on the back burner) they’ll eventually purchase that vehicle once they settle down.
What Bridgewater Nissan, Bridgewater Dealers can say is expect to see even more cars sales from millennial’s in 2018 and the years to follow. What other millennial car buying trends have you noticed? How do you think millennial’s are impacting the auto industry? Let us know by sharing your thoughts in the comments section below.
- Millennial’s is the generation born in 1982-2004
- Last year, millennial’s made up 26% of new car sales following Gen X (baby boomers still continue to dominate the market)
- Fewer millennial’s are getting their driver’s licenses than previous generations
- However, that doesn’t mean millennial’s will buy fewer cars
- Like marriage and starting a family, millennial’s delay purchasing a vehicle
- Because of this, they may own less cars in their lifetime than other generations
- Millennial’s see cars more as a practical resource, whereas other generations think of cars as symbols for maturity and independence
- This could be why millennial’s aren’t as eager to get their driver’s licenses and buy a car
- However, moving out to the suburbs and starting a family may force them to starting looking for cars
- Millennial’s nationally and internationally take Eco-friendliness seriously, which is why you should expect to see more eco-friendly cars in the future
- Millennial’s are also fans of compact cars, as they generally are more affordable and easier to drive
- While some millennial’s prefer ride-sharing services over car ownership, automakers won’t miss out
- Millennial’s use technology in their everyday lives so it makes sense that they would also use it when researching cars
- They research potential car purchases for hours and want to know all of the ins and outs (unlike other generations)
- This may give them a leg up at the negotiation table
For more information about millennial car shopping trends or, to buy Bridgewater cars, contact Bridgewater Nissan, Bridgewater Dealers.
- The Atlantic: Here Is When Each Generation Begins and Ends, According to Facts
- CNBC: Millennials buying more new cars than Gen X
- Time Money: Why There’s Been a Huge Decline in Drivers’ Licenses for Millennials and Gen X
- Los Angeles Times: Millennials and Car Ownership? It’s Complicated
- CNBC: Americans Buying Fewer New Cars in Lifetime
- CNBC: How millennials are reshaping car buying
- Nissan Newsroom Europe: 76 percent of millennials see switching to an eco-friendly car
- Kelly Blue Book: Compact Car Buyer’s Guide
- AutoTrader: The Next Generation Car Buyer Millennials: What You Need to Know