Generation Now: How Millennials Choose a Vehicle

Aug 17, 2017 | | |

Generation Now: How Millennials Choose a Vehicle

By Tess Karesky

The national fascination with millennials is as strong as ever. This preoccupation may be a bit tedious at times but it isn’t entirely without good reason. Millennials are disrupting industries left and right. The automotive industry has already gone through its scare and was relieved to find that millennials do want cars. A lot of them in fact. It’s projected that in three years millennials will make up 40 percent of new vehicle sales. We found the youngest driving generation also tends to have a much shorter car lifecycle. In a recent CDK Global-commissioned study, 60 percent of millennials stated they intend to keep their current vehicle less than five years, compared to 35 percent of Generation X and only 20 percent of baby boomers. While their car purchases might be increasing, they are not particularly pleased with the current purchase process. Millennials were 2.5 times more likely than baby boomers to say their overall experience with the auto industry is negative. Dealers need to make strides to adapt to this new generation of drivers. Our study takes a deep look at millennials’ preferred car buying experience and how they differ from previous generations. Let’s take a look at their major influencers in choosing a vehicle.

What motivates them to buy?

Unsurprisingly, convenience is the top car-buying motivator for millennials. While public transit and ridesharing have made getting around easier, having a car is still the ultimate convenience. Younger millennials (18-25), especially males, are also especially motivated by the social status of having a car. As ownership becomes more commonplace, not having a vehicle becomes more glaring. One young millennial explained “Uber was working ok for me, but then, all my friends and cousins had their own cars. It was not a nice feeling to not have one. In hindsight, I convinced myself that I needed a car, only because I was competing with them at some level.” For Older millennials (26-36), nearly 3 out of 4 said a lifestyle change motivated them to get a new vehicle. They’re at an age when they’re more likely go through major life shifts like moving for a job, starting a family, or getting a dog. This often means different vehicle features are important, necessitating a change. Meanwhile Generation X and baby boomers are more likely to buy a new car as an upgrade, something most millennials likely can’t afford to prioritize.

How do they narrow down their options?

When it comes to vehicle research, search is still king. A scant 2 percent of millennials did not report using search engines during the shortlisting process. Independent review sites are also a highly influential source according to 93 percent of millennials. Vehicle reviews and comparisons by experts provide a better understanding of the vehicle’s advantages and drawbacks. Their other main resource is word of mouth. Being newer to vehicle ownership, it makes sense they might want to get input from those with more experience. Social media has made it particularly easy to reach out to a large audience for advice. Finally, the manufacturer’s website is a big influencer — especially for younger millennials. In our interviews, many noted model videos as a favored feature on the manufacturer sites. Baby boomers are the outlier generation in their preference for information channels. They were the only generation with a majority indicating that they call or visit the dealership to help narrow the selections (20 percent higher than millennials and 25 percent higher than Generation X) and were the only generation to not have a majority use independent review sites.

How do they make their final decision?


When it comes to making the final decision, getting some actual experience with the car reigns supreme. Nearly all older millennials and 3 out of 4 younger millennials rated vehicle experience as most important. This means that car shoppers are unlikely to move to an entirely online vehicle purchase for a while yet, as the test drive is still a big influencer. Millennials also use cost-benefit comparisons to make their final selection. This generation is particularly money conscious, and they want to make sure they are getting the most value for their dollar. One millennial explained her process of creating a spreadsheet to compare different trims, ultimately deciding that the benefits of the higher trim were not worth the extra cost. Recommendations and independent online reviews also continue to play a role in this final selection process. The major distinction here between millennials and older generations is the influence of the salesperson on this choice. Nearly 3 in 4 Gen Xers and baby boomers said conversations with the salesperson influenced the finalization process, while less than half of millennials agreed. However, millennial women were more likely than their male counterparts to say the salesperson was an influencer, a trend that will continue in our article on how millennials choose their dealership.

Understanding how millennials narrow down their vehicle choice can help dealers with advertising, marketing and sales. We will look deeper into how dealers can use this information to better reach millennials in our next blog in this “Generation Now” series. Next up: Find out what influences millennials to choose a particular dealership to finalize their purchase.

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TESS KARESKY
Retail Insights
Tess Karesky is a Marketing Research Specialist at CDK Global providing insights and thought leadership to drive the industry forward. She has researched the behaviors and habits of Millennial, luxury, Hispanic and female shoppers, in addition to other consumer groups. Her findings include insights into optimizing web content, reputation, advertising, sales and service experience, and customer retention. Her research has been presented to automotive executives at Lexus, Audi, Nissan, Infiniti and GM, as well as industry events including the Driving Sales Most Valuable Insight award. She feels strongly in the value of quality, engaging research that provides actionable insights. She can be reached at tess.karesky@cdk.com.

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