SCI’s Jeremy Wyant steps in to discuss the millennial generation’s impact on the automotive business.
Believe it or not, millennials are buying cars, a crazy thought based on most articles you read about this generation, which usually goes something like “Millennials: the instant gratification generation with a deep sense of entitlement and poor work ethic.” Honestly, nothing could be further from the truth. Sure, there are lots of people with those characteristics, but they exist in every generation.
One thing I can say with certainty is that millennials are looking for a better way to buy a vehicle. We’ve never lived in a world without the Internet, and we’ve always had the ability to order anything we want online and have it delivered. This “new efficiency” has created an entirely new way of doing business, and our generation simply doesn’t want unnecessary steps in buying anything — including vehicles.
When researching Canadian millennial car buyers, I decided to take it to the streets and poll some friends of mine who, because they don’t work in the automotive industry, are your typical Joe customer. I wanted to get an idea of what motivated them to buy a vehicle, their research process, and their dealership sales experience. There were some common themes, and surprisingly many similarities to the typical car-buying funnel.
“What made you buy a vehicle?” A change in lifestyle was their main reason for buying or switching vehicles, needing more space, usually to accommodate kids. I get it — I now have three kids and just upgraded so we would all fit. Many of the same friends I polled also took fuel efficiency into consideration when buying a bigger vehicle.
“How did you research?” All used the Internet, though it was interesting that only one person knew what brand they wanted before researching, while the others had multiple brands and models in mind. They typically started on the manufacturer’s website to shortlist a few models and to get pricing and incentive information. They then visited YouTube and watched videos to get a better idea of vehicle features and customer reviews. Most ended on a dealership website looking at live inventory. A couple of people voiced frustrations about looking for vehicles on a dealership’s website and not seeing any real images: it was important for them to see the exact vehicle before making the drive to the dealership. When asked if they reached out to the dealership before visiting in person, most had not. And while some had submitted website forms, no one called the dealership.
“How was your in-dealership experience?” The answers focused on respect, pricing, and paperwork. Some had a great experience. Others said they felt judged, overlooked, and disrespected by staff when they entered the dealership. Some left feeling that the sales representative thought they were wasting time. It was about a 50-50 split on whether they took a test drive before buying or not. I was surprised that negotiating the price didn’t seem important, and in fact, everyone just wanted to feel like they were getting a “good deal”. In one case, the dealership threw in free oil changes and car washes for a year, and so they chose to buy from that dealership over a competitor with a lower price.
“Would you visit a dealership to see a vehicle that didn’t have pricing on their website?” It was a resounding NO across the board. That’s food for thought.
What struck me the most was a lack of clarity with the bill of sale. Almost everyone I spoke to told me that when they signed the paperwork, they found fees that weren’t previously discussed and products they didn’t ask for — the most common being tire protection. When I said they could have declined the add-ons they had no idea that was an option.
They felt pressured into signing to ensure they would still get the vehicle and when I made mention of OMVIC and “all-in pricing”, they didn’t know what that meant. For many, the in-dealership experience left them less excited than expected, especially considering they had just finalized the largest purchase of their life to-date. It’s unfortunate that something so simple as explaining the bill of sale could have such a huge impact on a customer’s in-dealership experience. Imagine leaving any other store not understanding your bill. It doesn’t happen there, so why should it happen at your store?
Overall, millennials really aren’t so different from previous generations. The biggest difference is that we want to do as much as possible from our smartphones, talk to the dealership on our terms, feel respected by the dealership staff, and leave the store with the feeling that we got a good deal. I can’t imagine anyone wanting anything else.
