by Noah Berman
The car-buying landscape is changing and millennials such as myself are why. We’re less car-focused, more technology-focused, less brand loyal, and we simply expect more. Millennials also account for $200 billion of purchasing power.
Unlike my baby-boomer parents, who at the age of 16 quickly rushed to the DMV to get their permit and begin the process of driving a car, I waited almost a year. Living in a suburb meant that none of my friends lived more than a few miles away, an easy trip on a bike. And with the power of social media and cell phones, getting in contact with them was simple and convenient.
Times have changed however, and as a college senior, I do have a car (that belongs to my parents), which I use to make the 20-mile commute to work. I hope that upon graduating I can live in a large city and use public transportation or car-sharing services such as Uber or Zipcar as my primary modes of transportation when I need a vehicle, with each company at my beck and call through their respective apps on my phone.
I do not want to be burdened with the costs of a car directly out of college because the cost of ownership of a car adds up quickly. Take for example my current car, a Mini Cooper.
IntelliChoice shows the cost of ownership over 5 years as being $30,797. Compare that to public transportation, where I would be paying no more than $150 a month, or a whopping $9,000 over 5 years! At those prices buying a car and maintaining it seems ridiculous. Although the commute may take longer, it seems a tradeoff worth making. Also, if you factor in the cost of a cell phone plan, which is almost a necessity in today’s high-paced electronic society, a millennial’s paycheck quickly starts to dwindle.
Don’t get me wrong; my future garage full of supercars seems more than real in my dreams, but that day may never come. There will however come a day when buying a car is necessary for me, whether it be because of a family or a lack of other forms of transportation.
What will differ between the way I buy my car and the way my parents bought cars is that technology will play a key role for me. According to a study conducted by Autotrader, “A full 95 percent of millennials said they went online during some part of the buying process, compared with just 79 percent of overall respondents.” The days of walking into a dealership without any knowledge of what car you want are long gone.
With companies that give you data ranging from reviews of the car you want down to the price of your exact specifications, the internet has not just given car buyers a place with aggregated data, it has given them a way to start negotiating before they even walk through the dealership doors.
But how does someone choose what brand they want to buy? Do they try out something new or go with something tried and true.
Interestingly, “As recently as the nineteen-eighties, nearly four-fifths of American car buyers stayed loyal to a brand.” During this time period there was a huge lack of useful information. People made decisions based mainly on advertisements and whether they had prior experience with a brand.
In today’s high-tech and information-rich society, reviews of cars can be found everywhere, ranging from everyday people like me to experts in the automotive field. Because of these reviews, brand loyalty has disintegrated. People are now more concerned with what car gets the best reviews, has the best price and offers the most features. Buying a car based on the brand has become a thing of the past and is just one more aspect that separates millennials from older generations.
As a millennial I have grown up around technology. I think it has grown faster than me, and although buying a new car may not be a high priority for me now, I know it will become one.
The way people buy cars is going to change. And who knows? The next big thing may be right around the corner.