Will Millennials Change How Cars Are Bought and Sold?

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Gen Y doesn’t seem to care much for cars. Based on sales and survey data, it’s clear that young Americans are far more interested in iPhones than cars. Only one of those two is considered a necessity nowadays, and it’s not the one that comes with a steering wheel. All of this ambivalence over automobiles may given millennials the upper hand if and when the time comes that they actually bother entering a car dealership.

A recent story in Automotive News focused on what it is that millennials want out of the car-buying experience. Naturally, members of Gen Y, who came of age with online shopping and Twitter, want things to happen fast. They want details about model options, pricing, financing, and more to be instantly available online—or if, in person, to be presented by a dealership staffer in the speed of a click. None of this wandering around the dealership lot to see what’s in stock or time-wasting “let me talk to the manager” games either.

Millennials also want car shopping to be a low-pressure experience, with little or no haggling. They prefer to have all of the information they need upfront, and certainly don’t want any “gotcha” surprises.

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While the story is presented as a primer on why Gen Y customers are different, and offers advice on how automakers and dealerships might try to market to them, the characteristics that supposedly set young consumers apart may seem awfully familiar. Consumers of all ages, after all, think car shopping is torture, or at least unnecessarily painful. Lots of shoppers would be happy if the classic car sale transaction—involving stressful negotiations, hours of waiting around, and a general lack of trust all around—was transformed along the lines of Gen Y’s preferences.

Thus far, however, car dealerships have been incredibly reluctant to change the way business is done. Despite the aggravation visited on customers, the system apparently maximizes profits, and therefore it works for automakers, car salesmen, and dealerships.

If dealerships haven’t changed strategies in generations, why might they be willing to tweak how cars are sold now, or in the near future? The biggest reason could be that they’ve had a hell of a hard time selling cars to millennials, and they might try anything, including (God forbid) the jettisoning of manipulative sales tactics, to tempt young consumers into buying cars.

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Much has been written about how, when compared to previous generations, Gen Y is remarkably uninterested in car ownership. The percentage of young people with driver’s licenses has plummeted. Given the state of the jobs market and the likelihood of student loan debt burdens, many young consumers don’t have the money to buy new cars. Even if they did, they seem to prefer to spend their money on smartphones and other gadgets, and view car sharing and living in cities with good public transportation as more sensible alternatives to the “American Dream” revolving around owning a car in the suburbs.

Some auto insiders have dubbed Gen Y as “Gen N” (because they’re neutral on buying cars), while an Edmunds post from earlier this summer focused on the “Young and the Restless” as one of the key demographics that is decreasing its car purchases. Last year, Americans ages 18 to 34 accounted for roughly 30% fewer new cars purchased than this age group did in 2007.

Clearly, automakers and car dealerships are struggling to convince Gen Y that car ownership is cool, or even necessary. So perhaps, in their desperation to attract younger Americans and make them happier, or at least more comfortable, with the car buying experience, dealerships and car salespeople may be willing to shift the way they’ve done business—and driven consumers crazy—for decades.

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Milllennials have been called “game changers” in the auto industry. “They are the next big segment of car buyers, and they’re defining the buying process,” says industry expert Dale Pollak. By 2025, Gen Y is expected to account for 75% of all vehicles purchased. Whichever automaker comes up with the business plan to woo this group best obviously is in a terrific position in the marketplace going forward.

If there’s one area to focus on in the hopes of reaching out to millennials, it’s probably the way prices are determined in the car transaction. Gen Y, more so than older consumers, absolutely hates haggling. More than half of millennials say they’d prefer to visit the dentist than haggle with a car salesman. After doing ample research online, here’s how they typically go about trying to buy a car, per Automotive News:

Heavily armed with pricing and vehicle information, Gen Y shoppers arrive at a dealership showroom with their minds made up to buy a specific vehicle at a specific price, not negotiate a deal, said Alison Spitzer, Rosa’s boss and vice president of the Spitzer group.

“These buyers aren’t looking for a salesman; they’re looking for a customer advocate,” said Spitzer, who just turned 33.

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They don’t want to joust back and forth with prices scrawled on paper. They don’t want to be upsold. They don’t want to be surprised, pushed around, or be subjected to mind games. They just want some quick, efficient help, and then they want to be off behind the wheel of their new car.

The question is: Will the auto industry give them what they want?

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

1 comments
CathyMorressey
CathyMorressey

Yes, as a 40-something, I definitely want information unavailable online, a high-pressure sales environment, and plenty of haggling. And if they don't do the "I'll talk to my manager" nonsense, why, I'm out of there.

Anyone else remember when Time reported news?