How Strategic F&I Addresses Millennial Car-Buying Concerns

Why technology, practicality, and financial stability matter to millennial shoppers

Millennials—people born between 1980 and 2004—are late to join the car-buying masses. The latest reports, however, indicate that this generation is finally entering the market at high speed.

In fact, a recent study by J.D. Power’s Power Information Network reported that the share of millennials in the new-car market jumped 28%. And by 2020, millennials are expected to capture 40% of new-car sales.

This is good news, but as a dealer, you must understand that this generation has different cares and concerns than traditional car buyers. These differences will require a new approach.

Practical purchase vs. status

In the past, vehicles were viewed as an extension of the buyer’s personality, and represented buyers’ social status in life.

Today, many millennials are saddled with college debt and don’t have the disposable income to make decisions this way.

For now, millennials view their vehicles as a means of transportation with a purpose. For instance, their cars help them get groceries back home more easily, or are used to taxi children in a growing family.

Because members of this generation have grown up in the technological age, however, they won’t buy just any car. Horsepower and engine torque may not interest the vast majority of this group, but technology certainly does.

A study of millennial car shoppers by Autotrader revealed that 70% of buyers listed technology and infotainment as must-haves.

So, if you want to grab the interest of millennial car buyers, you need to know your technology.

This includes the basics, such as how to pair their smartphone with the vehicle via Bluetooth, or conduct a thorough demonstration of the navigation and infotainment systems.

Meanwhile, as advanced driver assist systems and new safety features continue to push the limit of self-driving capabilities, dealerships must stay on top of these changes, and be able to give a complete review of all features.

Millennial shoppers will demand it, and a salesperson who doesn’t know how certain features work will not cut it.


The practicality of millennials doesn’t just impact the type of car they choose. This generation is also budget-conscious—and for good reason.

According to the Federal Reserve Bank of New York, outstanding student loan debt stands at $1.31 trillion, spread out over 44.2 million Americans.

With an average monthly student loan payment of $351 extending well into the future, millennials need vehicles that fit within their current budgetary constraints.

A 2016 LendingTree study revealed an increase in auto loans for drivers aged 18 to 34. The average loan amount, however, was $3,000 lower than for those aged 35 and up.

Although an increase in disposable income could account for the difference, in general, millennials remain wary of taking on more debt.

Leverage F&I as your opportunity

Now that millennials are starting to flex their buying power, it’s a good time to evaluate how your dealership should approach this new generation. Some key questions to consider include:

  • Are your sales and F&I departments trained to ask the right questions to get millennials in the right car, with the right financing and F&I products for their needs?
  • Do you have strong relationships with lenders across all credit tiers, and are your F&I managers equipped to submit applications that lenders want?

Because many millennials are facing uncertainty while they work to overcome challenges such as debt, expanding families, and growing careers, it’s important that you give them a sense of stability with strategic F&I offerings.

One of the best ways to appeal to this generation is through the sale of F&I products like vehicle service contracts or vehicle return protection.

These products can protect this demographic’s budget from unexpected expenses, and their loans from the risk of delinquency or default in light of an unforeseen circumstance that would keep them from making their car payment.

By providing increased security from life’s unpredictable nature, you are giving millennial consumers a tangible service of significant value. Beyond directly addressing pressing consumer needs, these products can increase your bottom line through the sale of upgrades, and generate repeat and referral business.

As executive vice president of dealer services at EFG Companies, John Stephens directs the company’s direct sales and service channel. John is responsible for leading the dealer services team in optimizing the profitability of EFG’s direct dealer partners, and supporting the use of EFG products and services.

John Stephens


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