Millennials (people born from 1981-1996) are an important car-buying
generation for today’s car dealers. According to an article by Max
Digital, 34 percent of millennials intend to purchase a vehicle in the
next 12 months, and this trend will continue as they grow their
careers and families.
What does millennial car buying look like?
For millennials, the car-buying process is significantly different
from that of Generation X and baby boomers. While older generations
spend most of their time at the dealership, millennial car shoppers
reportedly spend most of their time researching online prior to making
a purchase decision. According to CDK Global’s Millennial Car
Shoppers report, millennials spend more than 17.6 hours car
shopping online before visiting the dealership and nearly 75 percent
of millennials end up purchasing the vehicle they have in mind when
visiting the dealership.
This means that by the time millennials visit the dealership, they
are most likely ready to purchase a vehicle. The report also found
that 62 percent of millennials use the dealership website as a source
of information during the research process. This leaves car dealers
room to successfully reach millennial car shoppers during the online
research phase of the car-buying journey. How so?
Have a mobile-friendly website. According to CDK Global, 85 percent of millennials access
the Internet via their mobile devices (i.e. smartphones, tablets,
etc.). The report also found that consumers use smartphones more
often in the car-buying process and that a poor mobile experience
can turn car shoppers away quickly.
Increase web speed. The CDK Global report also found that millennials will not
wait more than five seconds for a webpage to load on a mobile
device. In addition to slow load times, millennials also respond
negatively to a lack of interactive features and poor quality photos
when mobile car shopping.
Incorporate more of the car-buying process online. According to CarGurus’ 2019 Buyer Insight Report, 60 percent
of millennial car buyers want to complete at least one part of the
car-buying process online. As a result, being able to start the
credit application or submit required documentation to finance a car
online may help streamline the purchase process and draw more
customers to your dealership.
How do millennials make car-buying decisions?
Affordability plays a significant role in the millennial car-buying
journey. According to the CDK Global report, millennials say they
don’t own a car due to purchase and maintenance costs and are more
likely to buy a car if it is financially feasible for them. Since
millennials are digital natives, they also place high value on having
advanced technology in their vehicles. Nearly 75 percent say that
technology – including navigation, Bluetooth connection, safety and
phone connectivity – are must-have features.
Are you looking to offer customers with bad credit a second chance
to finance a car?
According to a recent MarketWatch report, 43 percent of millennials
have poor credit scores, which means they most likely do not qualify
for traditional loans or financing to purchase a vehicle. Car dealers
that do not offer subprime vehicle financing may not have the right
resources and programs in place to sell cars to this market.
Through our subprime auto finance programs, Credit Acceptance offers
car dealers competitive advances, same-day funding with eContracting,
and the ability to provide a credit approval to every customer
regardless of credit history. To learn more about how you can become
an enrolled dealer in our program, fill out the Become a Dealer form on our website.