- March 21, 2014
Millennials may love things like Uber and public transportation, but they still buy cars. J.D Power and Associates, for example, found millennials accounted for 27% of new car sales in the U.S. in 2014. That's the second-largest group of new car buyers behind the baby boomers.
Yet how this generation buys cars differs from their boomer and even Gen X counterparts. By the time millennials step foot in the dealership, they've already done lots of online research and had plenty of conversations (usually by email or text) with a dealer's sales team. “They're more informed than any other group has been,” says Ken Caraglio, digital marketing manager at Naples Nissan.
Informed, and determined.
“They do not like to negotiate, so they do most of the work before they come into the store,” says Bill Finocchiaro, general manager of Gettel Toyota of Lakewood in east Manatee County. “They've found the vehicle in stock, already negotiated the price where they want to be, and they come in basically to test drive it and pick it up.”
At Gettel Toyota of Lakewood, millennials gravitate toward models such as the Corolla and Yaris. At Sarasota Ford, it's the Fusion, Escape and Explorer.
“The style factor is big for them,” says Caraglio. “Millennials like Nissan because our cars aren't just durable and reliable, but they have a little sex appeal. Our cars are not stodgy.”
But no matter the brand or model, if the car can't keep up with millennials' digital lifestyle, forget about it.
“The technology-driven pieces of the car are typically the ones that drive the millennials into them,” says Matt Buchanan, general manager and operating partner at Sarasota Ford and a millennial himself at age 31. “They don't have to have the nicest car or truck out there. They just want to make sure it has the technology inside of it that goes along with the phone they use.”
And maybe a little bit of personality. “Millennials tend to personalize their vehicles more than non-millennials,” says Finocchiaro. That means things such as custom wheels or opting for a leather interior over standard fabric.
If a millennial is buying a car, they seek to put down as little as possible, say area dealers, or they choose leasing.
“We've become more of a rental society than an owner society,” says Caraglio. “Plus, millennials' lifestyles can change in three years pretty rapidly.”
When Buchanan took over the Sarasota Ford dealership in 2011, he abandoned what he calls its “old school” techniques of pricing everything at full MSRP and “doing the negotiation thing.”
“You shouldn't have to go in and feel like you're getting beat up,” he says. “What millennials are looking for is a fair deal. They want to feel like they're getting taken care of, like they're special.”
Adds Buchanan: “If dealerships aren't changing the way they do business, then they're going to lose a lot of business in the future.”