Before they enter your website or showroom, something triggers millennials and Gen Z to start car shopping. What’s going on in their life to put them on the hunt for new wheels?
To capture this audience’s attention, download our guide: How to win over millennial and Gen Z car buyers. You’ll learn that this cohort is taking over the car market. And that they value luxury and pricing transparency—but that’s only the start.
In the meantime, let’s explore what compels millennials and Gen Z to reach for a new set of keys.
Reaching a breaking point with their current ride
Many millennials and Gen Z get the itch to buy a new car after learning what they don’t like about their current ride. For many, their current vehicle is their first car, perhaps one purchased solely with budget in mind or acquired as a hand-me-down. More than 60% of millennials and Gen Z feel like they’ve kept their first car for too long.
Often, maintenance costs piling up can compel millennials and Gen Z to ditch their current car for a new one. They’ll reach that tipping point when service costs begin to break their budget. Or it might just be that they’re sick of replacing parts or holding things together with tape. Even strange sounds and smells can be the final straw.
Or maybe, it just doesn’t live up to their current lifestyle.
After putting thousands of miles on that first car, millennials and Gen Z think about how to make a more informed decision on the next car. They want to:
- Get a car with better gas mileage
- Take more test drives to find the perfect model
- Spend more time researching
- Lead with their functional needs before style and aesthetics
They can finally afford the car they want
Growing up, millennials and Gen Z have faced numerous economic, social, and other types of life-changing events. Entering the workforce right after a recession, they then faced the pandemic about a decade later. That might have slowed their career growth and earning potential. Facing inflation and climate concerns may have also hampered their ability or interest in buying a car.
Some studies see millennials as being especially resistant to buying a car. They may choose to instead spend their money on travel, technology, or experiences. That’s especially true if they live in cities with robust public transportation. Plus, the rise in work-from-home jobs might reduce their need for a car.
But with millennials now in their 30s and 40s, many are finally beyond the penny-pinching of their youth. They have more disposable income. They might have left the city for a more sprawling environment. They might have kids to cart around. Many of them are also rediscovering the joys of road trips.
All this combined—more money, more responsibility, more interest in road-tripping—means they’re ready to shell out for a car that fits their lifestyle. After all, it’s not everyone that can afford the average used car payment of more than $500 or the average new car payment of roughly $700. But as their wealth grows and credit improves, those payments come within reach, even when they’re driven up by things like the inventory shortage.
So millennials and Gen Z finally hit the point where buying the new or used car they love is not only a necessity, it’s affordable—even if they decide to splurge. Then they can get what they really want, be it a 4×4, luxurious convertible, fuel-sipping hybrid, or something fast and sporty.
They’d rather pay a car loan than repair bills
Most millennials and Gen Z don’t want to spend hundreds a month just to keep an old, worn-out car on the road. Instead, it’s more fulfilling to put that money towards a shiny new (or newer) car that needs no or fewer repairs.
They could actually end up saving money. That’s because a vehicle from 2011 can cost twice as much a year to maintain than one only 5 years newer.
When selling a car to a millennial or Gen Z, you can explain the value of a well-documented service history. Especially if the vehicle has high miles or has more expensive parts. Showing off a strong maintenance history can help them realize the reliability bump over their outgoing vehicle.
These generations come to realize that even by not buying a new(er) car, they’re making a conscious decision about their monthly finances. Often, the appeal of trading in their problematic older car for a newer model gives them peace of mind. The payment might be higher, but at least the potential for surprise repair bills is lower. It’s easier to plan and budget for a static monthly payment than try to save—or turn to credit cards—when the car breaks down.
They want a more environmentally friendly car
Millennials and Gen Z are probably the most eco-conscious generation in modern history. They’ve grown up in the heat of climate change. And they’ve long been exposed to messages around recycling, conservation, and sustainability. These concepts now strongly influence their lifestyles and purchases.
So what is “the sustainability generation” to do when it comes to car ownership? Some might forgo it in favor of eco-friendly public transit, biking, or walking. Yet others don’t live in walkable areas. Or they simply want the freedom of a personal vehicle.
They might look out at their gas-guzzling, oil-leaking car and feel like they’re making a negative impact on the environment. That can compel them to start shopping for a more fuel efficient, less polluting, more eco-friendly car to rack up their next 100,000 miles.
These generations have memories of the recession-era Cash for Clunkers program. They watched as their parents traded in a gas guzzler for a newer, more efficient car. Maybe they’re even driving that 2009 hand-me-down model, but now it’s a decade-plus out of date on sustainable characteristics.
Studies show the most satisfying cars for millennials and Gen Z to be EVs and hybrids, even if that’s not what the majority buys. Other research highlights these generations’ openness to paying a premium for eco-friendly, sustainable products.
So park those green models at the front of the lot and the top of your online inventory. You may just hook millennials and Gen Z hoping to reduce their transportation’s impact on the environment.
How to attract millennial and Gen Z car buyers
Highlighting the upsides of a new car versus their old one makes it easy to get millennials and Gen Z behind the wheel. The reduction in repair bills and stability of a flat monthly car payment is also compelling. They finally have the buying power to get a car they’re proud of—and many want to spend extra for eco-friendly features.
But how do you wrangle these buyers to your website and showroom?
That’s all covered in the downloadable guide: How to win over millennial and Gen Z car buyers. Check it out for actionable steps to make your dealership the most appealing to millennials and Gen Z.