Study says Gen Z don’t like buying cars
Younger drivers would have had it with the dealership experience, with Gen Z being even more disenfranchised than Millennials. While it’s hard to imagine someone visiting a showroom during of the last 12 months has a different reaction. Incentives are down, prices are up, and chances are what you wanted to buy isn’t on the lot anyway. Someone who says they’ve had an exemplary dealership experience becomes about as common as people who claim to like going to the DMV.
However, CDK Global Inc. still chose to conduct a survey in hopes of determining how less tolerant younger shoppers might compare to older generations. Takeout probably isn’t going to shock you, though the sheer volume of first-time buyers who don’t care about dealerships might.
The study, which was published on Thursday and later shared by Automotive News, surveyed 1,100 recent car buyers in December 2021 and analyzed their preferences and difficulties during the car buying process, breaking down the results by age. CDK categorized Gen Z as car buyers ages 18-25, Millennials ages 25-40, Gen X ages 40-55, and Baby Boomers as those ages 56 and older.
CDK said 81% of Gen Zers said their biggest priority when buying a car was to take their time and explore all of their options, compared to just 73% of millennials, 60% members of Generation X and only 45% of baby boomers. The survey also found that Gen Zers had more difficulty buying a vehicle online than older generations.
Brendan Dougherty, CDK’s director of product marketing, attributed the trend to the fact that 56% of Gen Z respondents told CDK they were making their first car purchase.
“For most of these consumers, this is their first major purchase, and they assume they could do more of this thing online than they can actually do, due to the complexity of a transaction. automobile,” Dougherty said. Automotive News.
Luxury vehicles were also more popular among Gen Z, the survey found, with 39% of buyers buying a luxury car, compared to 27% of Gen X buyers and 12% of baby boomers.
This is rather interesting since we know that Millennials now own almost 7% of the country’s wealth. In contrast, baby boomers held 22% of the national wealth at the same age, according to data provided by the Federal Reserve. Considering this trend is supposed to expand over time, one would assume Gen Z would be in even worse financial shape – not to mention less time on Earth to hoard their finances. But it’s no secret that many people buy cars that are way outside their price range.
While your author would argue that the majority of luxury vehicles today don’t really offer more bang for their buck than in eras past, the marketing still makes them look a cut above their mainstream peers, and the loan conditions have been extended to a certain extent. where it’s not uncommon to see people paying off a vehicle for at least 70 months. Another possible explanation is that a majority of young adults (18-29) now live at home with their parents, even though they have a paid job. By avoiding rent or mortgage payments, it’s possible that a subset of Gen Z simply has more disposable income and has chosen to throw that money at premium brands.
Either way, the big takeaway from the study is that Gen Z don’t really seem to like the process required to get into a new car and are much less likely to own one, whether they’re sophisticated or humble. 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 wanted to get a comprehensive understanding of their options in relation to the elderly and took more time out of their week before making a final decision.
“[Gen Z] said they wanted someone to help them, they wanted to take their time, but they still valued the speed,” Dougherty explained.
CDK essentially exists to find ways to make money in the auto business and often works directly with dealerships, so there’s reason to believe the investigation isn’t another attempt to undermine the dealership model. so automakers can start direct sales. Joe Tautges, COO of CDK Global, suggested that dealers could benefit from streamlining the buying process while also taking more time to work directly with a customer to help them understand features while meeting their specific needs. But the company also works with manufacturers that seem to be pushing direct sales forward, so take all of the above with a grain of salt.
There are a lot of factors to consider here. Younger generations don’t incur the kind of wealth that their parents had at the same stages of life, so big purchases weigh much more heavily on them. We have seen this before with the housing market becoming prohibitive after 2006. The number of renters living in the United States continued to rise while homeownership rates remained relatively stagnant.
Vehicles have also become much more cash-intensive over the past couple of years, forcing some people to spend more on a vehicle they can afford – rather than one they actually want. That alone may be all there is to Gen Z having a lower tolerance for visits to the dealership and spending more time looking for cars – with the problem potentially compounded by the current situation, where the options are relatively limited and the haggling has almost disappeared out of the window.
Ultimately, these types of studies sound extremely familiar to those we’ve seen for years citing that Millennials buy fewer cars than their parents. We’re just further down the path now, with the average American having even 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. Something tells me that the days of overcharging customers are about to come to an end. But it’s also historically been much easier to talk about fixing a broken market than getting the job done.
[Image: Gretchen Gunda Enger/Shutterstock]
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