Gen Z Car Buying Behaviors

by Lindsey - Posted 3 years ago

Car buying trends and first time car buyer behavior.

Studies show that younger generations are slower to get behind the wheel. What does that mean for your auto dealership, and what might change that trend?

Gen Z lives in a digital world.

A recent report from Lang Marketing highlighted a new trend that sets them apart from their Millennial and Gen X predecessors, finding that more than 40 percent of 19-year-old Gen Z Americans (born after 2000) do not have a driver’s license and 48 percent of 16- to 18-year-olds do not drive at all

As the world becomes increasingly digital, the need to drive to engage in the world decreases.

What does this look like for Gen Z?

The rise of Ecommerce

Even in the pre-pandemic world, online shopping was becoming the norm. Everything from groceries to furniture could be purchased online and delivered to your door. Carvana even introduced online car buying and delivery.

Younger generations are more comfortable with online shopping, and you don’t need a car to shop on the web.

As the days of loitering at the mall become a thing that only existed in ‘90’s movies, Gen Z sees no need to drive anywhere to acquire the latest tech gear, clothing brands, or their favorite snacks.

Climate Awareness

Driving impacts the environment. Gen Z is probably more aware than any previous generation of their affect on the environment. And vehicles are often painted as villains of climate change. This could contribute to Gen Z’s lack of enthusiasm over driving.

Better access to Public Transportation

As climate change becomes a popular topic, it also influences the push for increased public transportation. 

Access to public transportation or ride-sharing isn’t limited to big cities anymore. As Uber and Lyft continue to grow, the need for a personal vehicle decreases.

Societal Changes and the Internet

Previous generations would count the days until they could get behind the wheel of their first car. Driving represented freedom and connection with other kids.

In today’s digital world, kids seek independence and connection through the Internet. Owning a phone has replaced owning a vehicle, and the cost is much less for kids to feel the same rite of passage.

Another major societal change is the prolonging of childhood. Kids stay kids much longer. Young adults do not have the same expectations, and in fact, independence is often discouraged. Fewer of Gen Z than previous generations will work at an afterschool or summer job. This makes buying a vehicle unnecessary. 

Could that be changing?

Pandemic-era Car Buying Habits Here to Stay

Covid 19 has caused many changes for the independent car dealership, and many of these shifts are here to stay.

While teenagers might not be in as much of a hurry to purchase their first vehicle, other generations, such as Millennials (24-39 years-old), are leading the covid induced car ownership boom. 

Nearly a third of people surveyed in the 2020 EY Mobility Consumer Index says they planned on buying a car for the first time within the next six months. Millennials represented 45% of those planning to purchase their first time.

An increase in first-time car buyers is one of the notable changes caused by the pandemic.

Why are more people choosing to become car owners?

Nervousness about Public transportation

As a society, we have become hyper-vigilant about our health since the beginning of the pandemic. The appeal of public transportation has dropped significantly as a result.

In 2020, public transport use for work travel declined by 69% from pre-pandemic levels.

77% of US consumers see commuting by public transit as risky.

From buses to the subway, and even Uber, people are thinking twice before using these transportation options that could expose them to a plethora of germs.

This alone is enough to drive many proponents of public transportation or ride-sharing into purchasing a vehicle for the first time.

As more people are vaccinated and infection rates lower, could this trend reverse? It will likely slow, but the hypervigilance surrounding health and the spread of germs is not something that will fade quickly, and many experts believe Covid-induced changes in car buying behaviors are here to stay.

More digital shopping options are appealing to younger generations

Independent auto dealerships are responding to the demand for virtual car shopping and buying options. VehiclesNetwork recently launched VirtualDealer, a way for independent auto dealerships to sell cars online and deliver them without the consumer needing to step foot on the lot.

Independent dealers who have digital retailing solutions saw 73 percent of their customers completing steps of the car-buying process online.

Like I mentioned above, younger generations expect ecommerce in everything, from buying food to big purchases like cars.

2018: 1 in 100 cars were sold online.
2020: 1 in 10 cars sold in the first half of 2020 were sold online.

The car dealerships looking to stay competitive are responding to that trend by offering more virtual options. As shopping for a vehicle from home becomes more common, younger generations will find it more appealing to shop for their first car in the same way they are accustomed to shopping for everything else.

More energy-efficient vehicle options

Young adults are not only hyperaware of their health, they are also inundated with the need to be more conscious about their impact on the environment.

And while many new car buyers are not looking for electric vehicles (only 6% of first-time car buyers report they will look for elective vehicles), vehicle efficiency does matter to younger generations. 

Highlighting any energy-efficient features of vehicles is one way to appeal to Gen Z.

The pandemic isn’t over yet, and it is continuing to drive change in many industries. Independent auto dealerships that are willing to listen to what consumers want will stay competitive.

Interested in learning more about how you can compete digitally? Ask us about improving your digital presence.