What’s different between each generation when it comes to buying a car?
In the past, when it came time to buy a car, the family loaded up and toured dealerships until they found one, they liked, then spent the day wrapping up the purchase. Not only was this long process expected, it was also necessary as technology was not fast, negotiations went longer, and it took more time to get bank approvals.
All that has changed as information is freely available, technology has greatly improved, and banks have buyers lined up, waiting for applications to be approved. In some cases, systems automatically approve applications, making for a very quick and efficient process for the consumer. Additionally, younger generations have adopted to the array of digital car buying options now available. Click here to check if you qualify for a used car loan at CARite.
Changes in the automotive industry have influenced each generation of car buyer differently. Let us examine below:
Baby Boomers Born: 1946-1965
Baby Boomers, are trading in their family vehicles for something with a little more power -- sports cars. When the nest is empty, the vehicle of choice becomes a sporty, fast little ride that may be the envy of all who see it. Boomers are accustomed to a physical car shopping process. They wanted to see, feel, touch, and experience the cars and could easily spend the day test driving multiple models and trim levels.
Baby Boomers have advantages when it comes to car buying that Millennials do not. They’ve had a longer period of time to establish credit and are able to qualify for manufacturer financing incentives at no – or low – interest rates, making financing the vehicle and keeping the cash in the bank more alluring. They are also more attractive to banks because many have long work histories and have established a solid financial profile.
Generation X 1966-1976
Topping the list of “auto loan-performance by age group” in 2017’s fourth quarter, Gen X’ers prefer minivans to other types of vehicles. The majority of these have three rows of seats too. Car dealerships explain this by the increased purchasing power and value that Generation X’ers place on practicality, luxury, and safety features for their families when they buy a car.
Gen X members are looking for practicality and are not as focused on status and luxury – they prefer to buy a car they perceive as safer and more suited for their family. Family-friendly and roomier vehicles such as minivans and SUV are on the top of the list which explains why brands such as Audi, Ford, and Volkswagen are extremely popular amongst the Gen X’ers.
Millennials 1977-1994
Millennials have a complicated relationship with buying cars. Some studies have shown that millennials prefer to spend their money on experiences rather than physical stuff, cars seem to be an exception.
Unsurprisingly Millennials were interested in smaller cars like mid-sized sedans and muscle cars for practicality and affordability. They were heralded as having different tastes than their parents since life may have been starting a little later.
Millennials use their tech skills to do some heavy research before buying. On average, they spend more than 17.6 hours shopping for cars online before ever stepping foot on the lot. They consult Yelp before going to a restaurant, read reviews on Amazon before buying a product, and you’d better believe that they want to know the reputation of the car and dealership before they go in to buy. In keeping with that theme, their second most trusted source is word of mouth from friends and family.
Generation Z 1995-present
What Generation Z is Looking For According to the research by MaritzCX, fuel efficiency - most likely as they’ve been raised in an era where environmental awareness is a common headline in the news. Additionally, they prefer cars over sport utilities and pickup trucks. Generation Z unsurprisingly has the lowest average car-loan balance ($13,853).
The Bottom Line
While Baby Boomers, Gen x, Millennials and Gen Z may have generational differences in their perception of what a car-buying experience should be, and which processes they are willing to accept in that experience, all of the generations simply want an easier buying experience overall. Our society has increasingly become one of convenience, and those convenient experiences are embraced by all age groups. For your convenience please click the link below to view cars for all generations at CARite.com.
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