Car Buying Trends for Millennials
The Lot Blog
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.