What Dealers Should Know About Millennial Drivers

Like every industry, the used car marketplace is working overtime to understand the buying habits of millennials. Young drivers make up a huge part of the market share, of course, and the decisions they make don’t always mirror those of the older generations. To position themselves for long-term success, used car dealers must understand millennial habits regarding vehicle purchasing, driving, and more.

To help in that understanding, we’ve come across a new survey that taps into millennial behavior. The findings may be illuminating to those who work in the used car space; we’ve summarized them in the paragraphs below.

Millennials are Financially Independent

The first thing to understand about young drivers is that they are financially independent. The stereotype may be of young people who depend on their parents for support, but the new survey results find that this is erroneous. Some specific findings:

Among this year’s college graduates, 57 percent of those who are getting a new car will pay for the entire purchase themselves.
Only 13 percent of the students who are getting a new car expect their parents to buy it for them.
67 percent of those students who are getting a new car will purchase a used car.
46 percent of the students who are getting a new car plan to spend no more than $15,000 on it.

Millennials Drive a Lot!

Something else the survey finds is that recent college graduates by and large plan to commute to their place of employment in their own vehicle. To wit:

71 percent intend to drive their own vehicle to work, as opposed to using any kind of public transportation.
58 percent will have a job in the city, and 40 percent will live in the city following graduation.

And what about ride-sharing services such as Uber and Lyft? This may surprise you, but actually, only about 1 percent of all recent grads say they will use ride-sharing services to commute to work.

Millennials Have Some Learning to Do

While this year’s college grads are smart in many ways, some of them still have some learning to do when it comes to the cost of owning a vehicle—and the cost of auto insurance, in particular. Keep in mind that the average annual cost of auto insurance for this group is $2,000. Nevertheless, the survey finds that 25 percent think that auto insurance will cost less than $250 each year! Meanwhile, 28 percent estimate somewhere around $500.

In all of these findings, there are opportunities for dealers to learn—but also for them to educate. Spread the word about the cost savings that are possible through used auto purchases. Let your clients know about the best ways to get affordable auto insurance. And remember that millennials represent a demographic that, by and large, wants to buy a car from you, and to do so with their own money. Don’t discount them just because they are young!