Study Claims Gen Z Doesn't Like Buying Cars
Younger drivers have reportedly had it with the dealership experience, with Gen Z even more disenfranchised than Millennials. Though it’s difficult to imagine anybody visiting a showroom within the last 12 months having any other reaction. Incentives are down, prices are up, and there’s a good chance whatever you wanted to buy isn’t going to be on the lot anyway. Someone saying they had an exemplary dealer experience is becoming about as common as people claiming they enjoy going to the DMV.
However, CDK Global Inc. still opted to conduct a survey in the hopes of determining just how much less tolerant younger shoppers might be compared to older generations. The takeaway probably isn’t going to shock you, even if the sheer volume of first-time buyers that don’t care for dealerships might.
The study, which was released on Thursday and subsequently shared by Automotive News, polled 1,100 recent car buyers in December 2021 and analyzed their preferences and hardships during the car-buying process — breaking down the results by age. CDK classified Gen Z as car buyers from the ages of 18 to 25, Millennials as 25 to 40, Gen X as 40 to 55, and Baby Boomers as individuals aged 56 and over.
CDK said 81 percent of Gen Z members said their biggest priority when purchasing a car was taking their time and exploring all of their options, compared with only 73 percent of millennials, 60 percent of Gen Xers and only 45 percent of baby boomers. The survey also said members of Gen Z had more difficulty purchasing a vehicle online than older generations.
Brendan Dougherty, CDK’s director of product marketing, attributed this trend to 56 percent of Gen Z respondents telling CDK that they were making their first car purchase.
“For most of these consumers, this is their first major purchase, and they come in with some assumptions that they could do more of this thing online than what they really can do, because of the complexity of a car transaction,” Dougherty told Automotive News.
Luxury vehicles were also more popular among Gen Z, according to the survey, with 39 percent of buyers purchasing a luxury car compared with 27 percent of Gen X buyers and 12 percent of baby boomers.
That’s rather interesting since we know that Millennials hold almost 7 percent of the nation’s wealth today. By contrast, Boomers held 22 percent of the national wealth at the same age based on data provided by the Federal Reserve. Considering that this trend is presumed to expand over time, one would assume that Gen Z would be in even worse financial shape — not to mention having less time on Earth to accrue their finances. But it’s no secret that a lot of people purchase cars that are well out of their price range.
While your author would argue that the majority of today’s luxury vehicles aren’t really offering more bang for the proverbial buck than in past eras, marketing still makes them out to be a cut above their mainstream peers, and loan terms have expanded to a point where it’s not uncommon to see people paying a vehicle off for at least 70 months. Another possible explanation is that a majority of young adults (18-29) now live at home with their parents, even if they’re gainfully employed. By avoiding rent or mortgage payments, there’s a chance that a subset of Gen Z simply has more disposable income and has elected to throw that money at premium marques.
Regardless, the big takeaway from the study was that Gen Z doesn’t actually seem to like the process required to get into a new car and is far less likely to own one — be it fancy or humble. Almost half (45 percent) of Gen Z respondents told CDK they were frustrated by having to wait for a salesperson when going to a dealership and were the least likely age group to recommend any dealership to a friend or family member. The group likewise wanted to have a comprehensive understanding of their options over older individuals and took more time out of their week before making a final decision.
“[Gen Z] said that they wanted someone to help them, they wanted to take their time, but they also still valued speed,” explained Dougherty.
CDK basically exists to figure out ways of making the automotive sector money and often works directly with dealerships, so there’s some reason to believe the survey isn’t another attempt to undermine the dealer model so automakers can commence direct sales. Joe Tautges, chief operating officer of CDK Global, suggested dealers might benefit from streamlining the buying process while taking additional time to work directly with a customer to help them understand features while catering to their specific needs. But the company also works with manufacturers that seem to be advancing direct sales, so take all of the above with a grain of salt.
There are a lot of factors to consider here. Younger generations are not incurring the kind of wealth their parents did at the same stages of life, so big purchases have a lot more riding on them. We’ve already seen this with the housing market becoming prohibitively expensive after 2006. The number of renters living in the U.S. continued to climb while homeownership rates stayed relatively stagnant.
Vehicles have likewise grown substantially more cash-intensive over the last couple of years, forcing some people to spend more on a vehicle they can afford — rather than the one they actually wanted. This alone may be all there is to Gen Z having a lower tolerance for visits to the dealership and spending more time browsing for cars — with the issue potentially made worse by the current situation, where options are comparatively limited and haggling has nearly gone out the window.
Ultimately, these kinds of studies feel extremely familiar to the ones we saw for years citing that Millennials were buying fewer cars than their parents had. We’re just further down the path now, with the average American having even less economic freedom than before. The obvious solution is to get more money into the pockets of regular people to deliver a healthier and more stable automotive market. Something tells me the days of being able to overcharge customers are about to come to an end. But it has also historically been a lot easier to talk about fixing a broken market than actually getting the job done.
[Image: Gretchen Gunda Enger/Shutterstock]
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