Generational Study: How Will Your Five-year-old Finance an Automobile?

Matt Posky
by Matt Posky
generational study how will your five year old finance an automobile

People love generational studies. The notion that being born a few years away from another person creates a disparate, irreconcilable identity is an appealing one and is, to some extent, backed by plausible evidence. After all, growing up in 1975 was different than growing up in 2005. However, when exactly those subtle differences surface to an extent where they can be measured is debatable.

That’s why I was so intrigued by a recent study indicating that Generation Z will be “nothing like their Millennial predecessors” when it comes to financing automobiles and purchasing automotive insurance. Members of Generation Z currently run between the ages of five and 21. So, how exactly will your five-year-old go about procuring coverage or a loan for their first automobile?

“Some of the biggest collisions on the horizon [will be] between the millennials and Gen Z. If people try to treat Gen Z like the millennials, that will backfire,” David Stillman, co-founder of Gen Z Guru in Minneapolis and co-author of the book Gen Z @ Work: How the Next Generation is Transforming the Workplace told Automotive News.

Stillman claims Generation Z is so incredibly tech savvy that they’ll use their phones to shop around for a better deal — which sounds quite a bit like what we’ve heard about Millennials in the past. Likewise, it isn’t as if Boomers and Gen Xers don’t have the means to hunt for a favorable insurance rate or auto loan. They are simply less likely to whip out their phone in order to do so.

“Gen Z can quickly look on their phone as to where they can buy the products cheaper, and it’s not scary to them,” said Stillman. “It’s probably easier for them to do that,” he said.

Profound. Okay, so Gen Z really likes smartphones.

They also won’t have the patience to do paperwork, according to “generational experts.” But a lack of patience is fairly common with any fresh-faced demographic. I wouldn’t expect a five-year-old to be willing to sit through a speech about contract clauses without needing a juice break for more than a couple of minutes. While most will eventually grow out of that trait, as the bureaucracies of the world gradually beat that instinct out of them, Stillman claims even the adults of Gen Z will be incapable of wading through “reams of paperwork” in an F&I office and are likely to do all of their research ahead of their trip to the dealership.

The solution, as Becky Chernek, president of Atlanta’s Chernek Consulting, sees it, is to ensure a tech-based approach that puts the product up front while providing transparency. Apparently, Generation Z will be also able to sniff out being swindles better than the older generations. If you’re a dealership that doesn’t adopt a online solution that allows for “self-desking,” Chernek claims you’ll be in trouble once baby can drive. Youngers will have already checked out fair prices and used third-party apps to handle their financing and leasing, leaving you with no sale.

The digitization of car sales is likely the most useful portion of this study. We’ve already seen retail chains obliterated by online shopping and there’s no reason to think the automotive industry won’t eventually endure similar challenges. But what if you’re on the receiving end of Generation Z’s wrath?

According to Stillman, they’re highly competitive. Dealing with a Gen Z salesperson will be like surviving an encounter with a caged tiger with genius-levels of intelligence. Stillman says that, unlike millennials, Gen Z grew up without participation awards — a claim I could absolutely not verify with research. But that apparent lack of emotional coddling has turned them all into cold blooded success stories. “This idea of fairness doesn’t work for them,” he said. “If you don’t reward them, they will have their side [job] and figure out other ways to make money.”

Dont’ worry, says Chernek, they’ll offer a square deal. She claims that, despite this need to achieve, Generation Z is interested in “being real and meeting customers face-on, being really upfront.”

All of them, I guess.

The entire profession of predictive analytics seems highly speculative and Generation Z doesn’t sound all that different from when people were still calling Millennials “Generation Y.” It’s one thing to assess consumer trends using actual data, but this sort of precognitive market advice seems generally worthless. Overgeneralizing is already it’s own sin, but most of these kids don’t even have a driver’s license yet.

That doesn’t mean we should ignore everything Stillman and Chernek are saying, though.

For one, technology will play a more important role in the future of automotive sales. We’ve already seen that trend taking hold with online inventories and online showrooms that allow you to effectively option and order a new model. But that won’t be exclusive to younger generations. Small children weren’t the ones that started putting Sears out of business.

Chernek wants dealerships to ask themselves if they’re going to be Blockbuster or a Netflix in the years to come. And that’s a probably the best takeaway from this study — not that Generation Z won’t settle for less, but that almost no one wants to schlep all the way to the showroom when they don’t have to.

As for what your five-year-old’s preferred way of getting an auto loan will be, it’s probably still too early to tell.

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2 of 29 comments
  • Notapreppie Notapreppie on Oct 10, 2017

    Given the way things are going between Cheeto Boy and Rocket Man, I think it's a bold assumption that the next generation will have cars to finance and insure.

  • Eyeofthetiger Eyeofthetiger on Oct 10, 2017

    In the future, Gen Z will wear iPhones implanted into their eyes. They will summon autonomous zero-emissions Amazon-owned personal transports with their thoughts, so there will be no interruption to the posting of govt-mandated hourly facebook status updates. The car enthusiasts will be pushed to the fringes of society. They will colonize around dilapidated oil rigs and refineries, waging war with other car enthusiasts and the U.N. for control of bootlegged gasoline supplies. They will communicate with CB radios and paper. Any car enthusiasts accused of having an iPhone or facebook account will be executed on the spot. It won't be pretty.

  • PeterPuck For years, Ford has simply reworked existing designs originating from Europe and Japanese manufacturers, not being capable of designing a decent car in the USA.What’s the last clean sheet design from the USA? The 1986 Taurus?And they still can’t manage to get things right.why is this? Are they putting all of the competent engineers and designers on the F150? Is woke diversification affecting them, as some rumours suggest? Are they rewarding incompetence?
  • Brandon What is a "city crossover"?
  • Tassos What was the last time we had any good news from Ford? (or GM for that matter?)The last one was probably when Alan Mulally was CEO. Were you even born back then?Fields was a total disaster, then they go hire this clown from Toyota's PR department, the current Ford CEO, Fart-ley or something.He claims to be an auto enthusiast too (unlike Mary Barra who is even worse, but of course always forgiven, as she is the proud owner of a set of female genitals.
  • Tassos I know some would want to own a collectible Mustang. (sure as hell not me. This crappy 'secretary's car' (that was exactly its intended buying demo) was as sophisticated (transl. : CRUDE) as the FLintstone's mobile. Solid Real Axle? Are you effing kidding me?There is a huge number of these around, so they are neither expensive nor valuable.WHen it came out, it was $2,000 or so new. A colleague bought a recent one with the stupid Ecoboost which also promised good fuel economy. He drives a hard bargain and spends time shopping and I remember he paid $37k ( the fool only bought domestic crap, but luckily he is good with his hands and can fix lots of stuff on them).He told me that the alleged fuel economy is obtained only if you drive it like a VERY old lady. WHich defeats the purpose, of course, you might as well buy a used Toyota Yaris (not even a Corolla).
  • MRF 95 T-Bird Back when the Corolla consisted of a wide range of body styles. This wagon, both four door and two door sedans, a shooting brake like three door hatch as well as a sports coupe hatchback. All of which were on the popular cars on the road where I resided.