Younger drivers will get it in the dealership experience, and Gen Z is more disenfranchised than millennials. Though it’s hard to imagine a different reaction from people visiting the showroom in 12 months. Incentives have gone down, prices have gone up, and chances are that what you want to buy isn’t in many places anyway. People who say they have exemplary dealership experience are just as common as those who claim they like going to the DMV.
However, CDK Global Inc. still opted to conduct a survey to determine how tolerant young shoppers are compared to older generations. The takeaway probably won’t shock you, although the number of first-time buyers who don’t care about the dealership can be huge.
Research, Posted Thursday then share with car news, surveyed 1,100 recent car buyers in December 2021, analyzing their preferences and difficulties in the car buying process, and breaking down the results by age. CDK divides Gen Z into car buyers 18-25, Millennials 25-40, Gen X 40-55, and Baby Boomers 56 and older.
According to CDK, 81% of Gen Z say their top priority when buying a car is to spend time exploring all options, compared to 73% of millennials, 60% of Gen X members and 45% of Baby boomers. The survey also found that Gen Z had a harder time buying a car online than older generations.
Brendan Dougherty, director of product marketing at CDK, attributes this trend to the fact that 56% of Gen Z respondents told CDK they were buying their first car.
“For most of these consumers, it’s their first major purchase, and because of the complexity of the transaction, they think they can do more online than they can actually do with a car,” Doherty said. . car news.
The survey found that luxury cars are also more popular among Gen Zers, with 39 percent of buyers buying a luxury car, compared with 27 percent of Gen Xers and 12 percent of Baby Boomers.
This is interesting because we know that millennials now own nearly 7% of the country’s wealth. By comparison, baby boomers own 22 percent of national wealth at the same age, according to data from the Federal Reserve. Given that this trend should expand over time, one would assume that Gen Z will be in worse financial shape — not to mention having less time on earth to hoard their finances. But it’s no secret that many people buy cars out of their price range.
While your author will argue that most luxury cars today are no better deal than they were in the past, marketing still makes them look a notch above their mainstream counterparts, and loan terms have been extended to a certain extent. It’s not uncommon to see people paying off a car for at least 70 months.Another possible explanation is Most young adults (18-29) now live at home with their parents, even if they have a paid job. By avoiding rent or mortgage payments, a segment of Gen Z may simply have more disposable income and choose to put that money into premium brands.
Either way, the biggest takeaway from this study is that Gen Z doesn’t seem to really enjoy the process it takes to get into a new car, and is far less likely to own one, whether they’re sophisticated or unpretentious. Nearly half (45%) of Gen Z respondents told CDK they were frustrated with having to wait for a salesperson when visiting a dealership and were the age group least likely to recommend a dealership to a friend or family member. The group also hopes to get a full picture of their senior-related options and spend more time during the week to make a final decision.
” [Gen Z] Say they want someone to help them, they want to take it slow, but they still value speed,” Doherty explained.
CDKs exist essentially to find ways to make money in the auto business, and often work directly with dealers, so there’s reason to believe the investigation isn’t yet another attempt to disrupt the dealership model so automakers can start direct sales. Joe Tautges, COO of CDK Global, suggested that resellers could benefit from streamlining the buying process, while also spending more time working directly with customers to help them understand features while addressing their specific needs. But the company also works with manufacturers that seem to be pushing direct sales, so take all of the above with a grain of salt.
There are many factors to consider here. Younger generations don’t have the kind of wealth their parents had at the same stage of life, so big purchases weigh more heavily on them. We’ve seen this happen before, after 2006, as the housing market became prohibitive. The number of renters living in the U.S. continues to increase, while the homeownership rate is relatively stagnant.
Cars have also become more cash-intensive over the past few years, forcing some people to spend more on cars they can afford — not the ones they really want. This alone may be the whole reason for Gen Z’s lower tolerance for visiting dealerships and spending more time looking for a car — a problem that may be exacerbated by the current situation, where options are relatively limited and bargaining is almost done. disappearing windows.
At the end of the day, these types of studies are all too familiar to those we’ve seen over the years who think millennials buy fewer cars than their parents. We’re just going further now, and the average American has less economic freedom than before. The obvious solution is to put more money in the pockets of ordinary people to provide a healthier and more stable auto market. I’ve been told that the days of overcharging customers are coming to an end. But historically, it’s easier to talk about fixing a broken market than to get the job done.
[Image: Gretchen Gunda Enger/Shutterstock]
Become a TTAC insider.Be the first to get the latest TTAC news, features, shots and all the truth about cars Subscribe to our newsletter.