Millennials have been accused of killing the auto industry for years, but it turns out they do want cars—they just couldn’t afford them. Now that they’re planning their purchases, what do they want in a car? We have four stats to demystify the Millennial driver…
Along with starter homes, casual dining, napkins, and a wealth of other industries, Millennials have been accused of killing the auto industry for years. In 2013, DrivingSales.com found that Millennials drove approximately 20% less than their parents did at the same age. Many deduced that this change in habit was due in part to a lack of interest in going out, with Millennials satisfied to sit around and socialize on their phones. This, of course, is a myth that’s since been busted. While it’s true that many Millennials (and Gen Z) are forgoing getting their driver’s licenses in favor of Uber and urban public transit, the truth is that 18-35-year-olds increasingly do want to drive—and buy cars to boot. They just couldn’t afford it before. Now, however, as Millennials slowly break into adulthood, they’re getting better jobs, lowering their debt, and starting families—a recipe for needing some wheels.
Lucky for auto makers, this trend is already on the upswing. Brandwatch predicts that by 2020, 40% of new car buyers will be Millennials. In 2016, General Motors says customers under the age of 34 accounted for 20% of the company’s sales—up 5% since 2010—and last year TransUnion found that 21-34-year-olds are taking out auto loans at a rate 21% higher than Gen X did at their age. According to Ypulse’s own recent survey data, 70% of 18-35-year-olds already personally own/lease an automobile and 69% don’t agree with the statement that you don’t really need a car to get around these days. Additionally, 45% of Millennials say they plan to buy their first or next car within five years.
This is a big opportunity for the auto industry. Millennials are the largest generation in the U.S. and in 2017, they spent an estimated $200 billion. And with Forbes reporting that 18-35-year-olds will have the most spending power of any generation in 2018, there is plenty of opportunity for brands to appeal to them. Here are four stats we uncovered to better understand how they’re buying cars today:
1. Nearly half of Millennials plan to buy a certified used car.
While Millennials are finally pulling in enough cash to buy a set of wheels, they’re still being practical with their purchases: only 34% of 18-35-year-olds plan to buy a brand new car. However, only 9% plan to buy an uncertified used one, revealing their pragmatic side once again. Nowadays, however, getting the pre-owned car of your dreams is easier than ever, and might not even involve going to a used car lot. Auto ecommerce sites are on the rise, expanding the traditional local marketplace. Though most 18-35-year-olds say they will buy a car on a lot, 88% say they will research their next car purchase online first, according to Brandwatch, regardless of its new or used status.
2. The majority of Millennials think hybrid cars are cool.
While Millennials like the idea of a hybrid vehicle—or at least think they’re in style—that’s not necessarily the first thing they’re looking at when they buy. In fact, just 18% of 18-35-year-olds say being hybrid or electric is an important feature to consider when buying a new car, and 29% say they’ll consider the car’s eco-friendly value. Though Millennials say they plan to spend an average of $29,123 on their next car purchase, they are still cost-concerned. With hybrids landing on the pricier side, many will set aside their environmental values in favor of a more affordable set of wheels.
3. Over two-thirds of Millennials prefer an understated car to a flashy one.
Millennials are notoriously unswayed by opulence and have altogether redefined what luxury means. Instead of opting for conspicuous consumption, 18-35-year-olds today are drawn to value. They want a good car for a good price, and they want it to last—looks be damned. When asked what the single most important feature is when considering a car, “reliability” topped the list. And when asked what features they will consider when purchasing a car, 69% said fuel efficiency, 67% said reliability, and 60% said comfort.
4. Millennials believe self-driving cars are the future—but they’re not sold on them yet.
With tech companies racing to be the first to release a marketable self-driving car for consumers, there’s no doubt that driverless vehicles are the wave of the future. Millennials know this, but that doesn’t mean they’re not wary of the prospect. Though 70% agree that self-driving cars are coming, only 57% say they would ride in one, and they’re certainly not looking to buy them. Just 21% of 18-35-year-olds say that “innovative technology” is an important feature when considering a car, and just 2% say it’s the most important feature of them all.