Marketing to Millennial Car Buyers

Gen Y: Not so different after all?

Millennials. Does the word evoke a groan of frustration or even contempt from you or members of your staff? Maybe it’s time to stop thinking about the millennial generation as a sales and marketing problem to be solved at best and nuisance at worst, and view it instead as an opportunity to set up your auto dealership business for years to come by tapping into the lifeblood of the demographic that’s going to drive commerce for the better part of the 21st century. One thing’s for certain: This generation is not going away or changing its ways any time soon, so like it or not, the millennials are your customers of today, tomorrow, and many decades to follow.

But are the millennials really as different from their generational predecessors, Generation X and the baby boomers, than their detractors would have you believe? Maybe not. The curious thing is that the technology, social media, shopping habits, and other factors that many see as the signposts of the millennial generation may be seeping into the behavior of previous generations a lot more than many people realize. The so-called generation gap could be closing faster than we realize, making the millennials less mysterious than they’ve often been made out to be.

Definition and size

What exactly is a millennial? Not everyone agrees on the age range, exact definition, or total size of this generation, which is often also known as Generation Y. The general consensus, however, is that people born in the early 1980s—1981 seems to be the most commonly cited year, and is the one used by the Pew Research Center for its definition—constitute the beginning of the millennial generation, making the oldest Gen Yers now hitting their midthirties.

The cutoff birth year for millennials seems more open to debate; some believe it ended in the 1990s, but other sources push it into the 2000s. Authors William Strauss and Neil Howe, who famously wrote about the millennials’ place in the generational cycle, most notably in the 2000 book, Millennials Rising: The Next Great Generation, defined 2004 as the last birth year for Gen Y. By their definition, the youngest of the millennials are not even of driving age yet, but will be in about five years. So with the youngest and oldest millennials having an average life expectancy of another four to seven decades, their generation will be the dominant consumer force for most of this century.

Statistics on the millennials’ share of the U.S. population back this up. Again, population estimates of Gen Y vary by definition, but this past January, the Pew Research Center projected that the millennial population will surpass 75 million in 2015, peaking at more than 81 million by 2050. The 75 million total will make the millennials the largest living generation in the U.S. in 2015. Consider that for a moment. What has been for years consider the outlier generation is about to become the predominant one.


Stereotypes of millennials as lazy, entitled, apathetic, indifferent to wealth, immune to traditional forms of media and advertising, and so on really don’t hold water because what twenty- or thirtysomething generation didn’t have similar accusations said about it? And what generation’s consumer habits weren’t shaped by the economic and political factors of the time?

Like all generations, the millennials are very much a product of their times, and for most of their adult lives, that meant a poor economy topped off by a major recession, relatively high unemployment, soaring housing and education costs, and more. Of course, it’s not fair to say the millennials had a harder time than any previous generation, but the economic climate has helped create a generation that often views big-ticket and luxury purchases differently than its predecessors. The problem may not be a generation with a set of consumer values that are for some reason wildly different from past generations’, but merely a case of millennials’ diminished economic expectations.

Yet Generation Y may appear a contradiction in certain ways because some of its perceived consumer habits seem indulgent to prior generations: Its obsession with having the newest and flashiest electronic gadgets, desire for immediate gratification when making purchases, and expectation to always pay a rock-bottom price for a top-tier product sound like the characteristics of the very affluent, not the generation of lowered expectations.

The reason? Technology. The oldest of the millennials were using the Internet by their teen years; the youngest of them may well have had their first cell phone before starting school. The technology and connectivity booms of the past 20-plus years have left older generations gasping for air to keep up, but for the millennials, it’s all about fast, faster, fastest.

Growing up in an accelerated technological era made most millennials take to new technology like fish take to water. Again, the millennials are the products of the times they grew up in, not an aberrant generation rebelling for the sake of rebellion. It’s natural that as technology offers faster connectivity, more convenience, and new features, GenY will be the earliest adopters.

The subject of technology’s effect on the millennial generation brings us back to the idea that prior generations are closing the gap. Think for a minute about how many of your friends and professional peers, regardless of age, don’t use the Internet daily, have a smart phone, or belong to at least one social media site. Odds are the number is very low. You may even consider them contrarians or Luddites for resisting change.

Sure, the older generations may not view their devices as extensions of their limbs, join every available social network, or prefer texting to phone or face-to-face conversation, but they are increasingly embracing the same technology, and embodying many of the same consumer habits as the millennials: online shopping, extensive use of Internet research and review sites, and more. A business that fails to embrace these technological changes in consumer behavior isn’t just turning its back on millennials, it’s neglecting every key demographic.

It’s true that studies have revealed some key differences between millennials and their predecessors: Millennials are more likely to browse on mobile devices than desktop or laptop computers, they tend to prefer texting to phone conversation, more than two-thirds are unmoved by celebrity endorsements of products, etc. But most of the differences exhibited by millennials involve degrees of usage, not major paradigm shifts in attitudes.

In a number of ways, millennials share traditional values in terms of their shopping and media consumption. Millennials are brand loyal, but expect brands to have a strong, diverse social media presence. And though Gen Y is device-oriented, Comcast reports that it hasn’t turned its back on traditional advertising via television as dramatically as some think; 2014 data reveals that 60% of millennials still subscribe to traditional cable and satellite TV services, a rate lower than that of previous generations, but not shockingly so.

Millennials in the auto market

To gauge the current real-world state of selling cars to and building loyalty among the millennial generation, Dealer Marketing Magazine spoke to several industry experts about the challenges of meeting the needs of this critical demographic that isn’t going away, and in fact, will be the primary focus of sales efforts by the automotive industry for many years to come.

Thank you to our esteemed experts Dean Evans, CEO of LotLinx Inc., Lacey Plache, chief economist at, and Scott Pechstein, vice president of national sales at Autobytel Inc., for their astute observations and specific insights about how dealers and manufacturers can better understand and capitalize on the booming market of millennial car buyers. It’s interesting to note how a number of their responses confirm the suspicion that what millennials want isn’t necessarily as different from past generations as many think.

Dealer Marketing Magazine: How do dealerships lure millennials into car shopping when faced with factors such as possible declining interest in vehicle ownership among younger people and the increasing use of ridesharing services such as Uber?

Dean Evans: OEMs need to lead the charge in getting millennials engaged with their brands. Dealers can’t do this on their own. Dealers can do some of it; for instance, they can utilize more mobile advertising and be aware that social tools, such as word of mouth and online reputation, are important factors for this generation of buyers. Dealers should also focus on hiring younger employees to deal with customers. These younger dealers often buck old-school trends such as commission-based pay plans and are open to more modern plans with the goal of educating the buyer versus selling the buyer.

Millennial buyers are more apt to find pricing and inventory online and only go into one dealer to buy that one car that most closely meets their expectations and needs. That means dealers need to ensure their inventory is merchandised correctly on all the third-party auto sites and that with one click only, the consumer can be transported right to the seller versus needing to fill out a form to get more information. It used to be that consumers employed a “give to get” strategy: “We will give you our contact information to get the information we’re seeking.” Millennials are changing the game and are employing more of a “you give me and I’ll decide what you get” strategy. In other words, today’s dealers need to be upfront with all information and the millennials will be the ones to choose how to proceed.

Lacey Plache: We at are not seeing any evidence that younger people are buying fewer cars due to a declining interest in vehicle ownership. Rather, our analysis indicates that economic constraints stemming from the recent recession have hit younger people particularly hard. As they have struggled to find jobs and grow their income, they have had limited demand for vehicles.

Also, generally speaking, they have not been strong candidates for lenders, which impeded their ability to buy a car even if they wanted to. Job woes still continue for many younger people, but for those who have more recently seen improved job growth, household formation has consequently increased, and we have seen that they have bought more cars as well. We have also seen that when younger people do buy cars, they are more likely than the older people in the same income group to buy luxury and sports cars. To us, this is additional evidence that young people are indeed interested in cars, but haven’t bought them due to financial issues.

So what do dealerships do with this information? A key focus would be that they can sell “bang for the buck,” emphasizing content, especially technology, and performance, on vehicles that are more affordable. They can also work on creating interest now in customers who may not yet be in a position to buy, but will be able and compelled to do so when their economic situation improves.

Another note: We do not believe that ride-sharing services such as Uber are close competitors to car ownership. They are much more of a threat to the taxi industry and, to a lesser extent, to the local rental car business. Generally, people who use these services would not have bought a car (or a second car) anyway. And, in any case, projections by industry analysts on the size of the market for these services, measured in terms of vehicle miles driven, remain well under 1%—hardly a threat to car sales.

Scott Pechstein: I’m not necessarily convinced it’s a decline in vehicle ownership so much as it is an issue of the buying experience millennials prefer, the manner in which they prefer to communicate, and whether or not their expectations are met. As a matter of fact, I’ve seen recent studies where younger car buyers tend to be very loyal to their vehicles, and to the specific brands that interest them most, once you engage with them—and communicating by texting, audio, or video is probably the best way to foster that engagement. Couple this with a low-pressure sales environment like the Apple Store experience, and you stand a greater chance of appealing to a younger demographic.

The use of Uber, while very popular, is more of an urban transportation issue rather than a general rebellion to owning a vehicle.

DMM: Social media and digital marketing are obviously key to reaching millennials, but those tools are increasingly being used for all car-buying demographics. How necessary is it to have additional or differentiated campaigns to make these digital tools effective with millennials?

DE: Millennials are demanding more transparency and speed in their car buying process. This is a universal consumer need. The belief is that if you are marketing with the millennials as a target, these campaigns will resonate with other generations of buyers as well.

LP: To understand how to advertise to millennials, it is key to understand how millennials’ use of the digital space differs from that of older consumers. For example, at, we have found that millennials represent a much larger share of our car-shopping audience on mobile than desktop (53% of our mobile shoppers are 18-34 years old versus 29% of our desktop and tablet shoppers). In addition, we find that mobile use is much higher on our site in the evenings and nights (6 p.m. to 6 a.m.) and on weekends (Saturday and Sunday) than during daytime or weekdays. Targeting campaigns to these devices and times could be significant in capturing millennials.

Another course of action would be to research social media influencers. Who do millennials go to for advice on car shopping—and even more importantly, whose advice do they act upon? Connecting with key millennial influencers can be key to reaching millennials. Of course, has a lot of influence due to our unbiased editorial content, our user reviews of cars and dealers, our meticulously moderated forums, and our far-reaching social media audience.

SP: I don’t think you need to focus on different campaigns, but you do need to allow customers of all ages to text rather than call or email. Our research shows that texting among all age groups is growing by leaps and bounds in popularity, outpacing phone call volume and emails across all demographics. The statistics are staggering when you think about it. Roughly 97% of text messages are opened, and 90% of text messages are read within three minutes of delivery. If you’re not offering this option, especially for millennials from the texting generation, you’re missing out. Be sure you’re using a platform that assists with legal compliance—one that manages opt-ins and opt-outs, and one that integrates with your CRM for lead management and follow-up.

DMM: What are the unique financing issues and challenges that dealerships need to understand and address to sell to millennials?

DE: This generation of buyer wants the most aggressive terms in both interest and down payments.

They expect lightning-fast transactions, including more online paperwork for vehicle sales and financing. Obviously, millennials, being the youngest car-buying generation, need the most aggressive financing due to the average buying power of this generation. As employment for this age group continues to improve, so does their buying power.

SP: Overall value, as it relates to fuel economy, the availability of eco- and tech-friendly features, and generous warranties, [are all] big drivers for millennials, so keep that in mind when it comes to engagement.

One of the biggest shortcomings we see is when dealers fail to offer a quality online payment tool at their websites—a tool that really drills down to take into consideration a wide range of factors that impact what millennials can afford. Today, there are virtual showroom technologies available to dealers and consumers that enable live video chat coupled with co-browsing. Co-browsing is a fantastic way to explain all the options available to younger buyers when it comes to financing.

DMM: Does the long-term responsibility for connecting with and building loyalty among millennials belong more to manufacturers or dealers, and why?

DE: The answer is both. The OEMs need to keep making the brand strong by answering questions like, “Is it a cool brand and is the vehicle quality sound?” and the dealership needs to make sure that the on-the-ground experience is good. For instance, was there fast and quality service, did we give them the vehicle information they needed upfront? The OEMs that see marketing to millennials as a joint effort and coordinate accordingly will be the winners of this group of buyers.

LP: Both should take responsibility. Customers are willing to pay a premium for trust. Fostering trust decreases the necessity of lowering prices to attract customers. Both dealers and manufacturers will benefit from doing their parts.

SP: Products that appeal to younger car buyers—and fresh offerings that enable millennials to [transition] into other models—are certainly the starting point, but building long-term loyalty is the dealer’s responsibility, and ideally so. The treatment millennials receive at the dealership and the service they’re provided over the lifetime of vehicle ownership, is what builds trust and loyalty for the long haul. Quite frankly, this isn’t unique to millennials. This is true of all customers, no matter what age.

DMM: What is your take on the idea that millennials want authenticity rather than advertising, and are particularly brand-loyal?

DE: Millennials drove the social revolution by demanding that companies that they do business with are more transparent and authentic, so, yes, authenticity has a big impact on their decision-making. That does not make them less brand-loyal. They continue to be influenced by brands by their parents [buy] and, more importantly, their social circle versus the old days of believing advertising.

The bottom line is: Give millennials all of the information they need to create an informed opinion, a transparent experience without the need for forms and other obstacles, and offer them value, and they will be brand-loyal.

SP: I agree. Millennials conduct a lot of research and rely heavily on the opinions of their peers. They’re exposed to a variety of information, facts, and opinions at a very early age and I believe that with this level of information access comes the ability to be able to spot the inauthentic fairly quickly. Millennials respond well to the consultative approach (think Apple Store) versus the hard-sales approach, and prefer hearing how great a brand is because their friends said so . . . not because the brand said so.

Stay tuned

Rest assured that Dealer Marketing Magazine will continue its coverage of the millennial market as it expands and changes, and explore how it affects all aspects of dealership operations, from marketing to sales and F&I to fixed operations. We welcome your thoughts on the millennial market; tweet them to us @DealerMarketing or email them to

Kurt Stephan


  1. Avatar
    Donna March 26, 2015

    This is one of the most informative, detailed, and straight-forward entries I’ve read on this topic (the evolution of consumer behavior – particularly, millennials). Extremely insightful association between millennial purchase behavior to what we would commonly expect from the, “wealthy shopper”. Perhaps these comparable attitudes are what has REALLY granted millennials’ their “sterling reputation” amongst previous generations… non-millennials just have to keep in mind (and remind themselves again and again) this generation is a direct product of their environment – they not only don’t know “better,” they don’t know different. Keep up the great work, Kurt!

  2. Avatar
    terri December 15, 2015

    great article!

  3. Avatar
    Dealer Guy January 03, 2017

    Perfect timing in my quest to dominate the millennial market.


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