Millennials are a trending topic pretty much anywhere you look these days. From the business world to the latest tech trends and now to the auto industry, the media is all a buzz about how this generation of young(er) adults is changing the shape of the world we live in. And according to Eric Lyman, True Cars’ VP of Industry Insights, it’s a trend auto dealers will continue to see through the rest of the decade.
Just six or seven years (depending on how you’re counting) from the end of the Great Recession, 2015 broke the previous record for the number of cars and light trucks sold in the United States—a record that had stood for fifteen years. This was due in large part to millennial-made purchases, which overtook somewhat mediocre sales to Gen Xers in 2014 and which are poised to surpass sales to Baby Boomers any year now.
Many of today’s young professionals are making higher entry level wages than their counterparts in the past few generations thanks to the booming tech industry and the lucrative jobs requiring specialized knowledge it has created. Others can count on Baby Boomer parents who are once again financially secure enough to lend a hand, and of course everyone has been encouraged to buy by still-low interest rates and less fearful lending practices.
And it isn’t just millennials buying new cars that makes them the fuel that keeps the current auto industry growth engine running. Lyman points out that many millennial buyers are likely buying used cars, and reflects that a strong used car market (we might add, a used car market that is increasingly favoring late model inventory) helps keep new car sales strong, as well, as it allows for higher trade-in values and private sale prices.
By the end of the decade, the youngest millennials will be in their mid-twenties—still starting careers, starting families, and making other life changes that often accompany, encourage, and provide the driving force for new car purchases. With continued economic growth and given the size of the millennial generation, it’s hardly a surprise that Lyman predicts millennials to remain in charge of upward-trending car sales line through at least the next five years.
While Lyman provides plenty of insights into who’s buying cars and why they’re buying them, he doesn’t say much (anything, really) about what car dealerships can do to draw millennial buyers in. If you’re a regular reader here, you know what we think: a strong online presence with plenty of video that will get you at the top of their list whenever and wherever they start their search.
With most car buyers and virtually all Millennials doing some or all of their car shopping and comparing online, and with video the most trusted form of media by today’s consumers, the solution seems pretty simple from our perspective. Of course, that may just be because we already built it.