Millennials, the constantly-stereotyped cohort of young adults who won’t watch a black and white movie but still like cars, are every automaker’s go-to crowd for future sales.
Hyundai has announced a plan to tap these would-be car buyers in a way that drills into the very core of what they desire in vehicle ownership (or so studies show). Think of it as the Netflix approach to sales.
First off, any Millennial hoping to trade in his or her bikes for the joy of an internal combustion engine is out of luck. Hyundai’s new take on sales applies to only one model — the all-electric 2017 Ioniq, which bows with 124 miles of range.
The automaker’s “Ioniq Unlimited” offer is a subscription-based ownership “experience” that allows buyers to keep hassle to a minimum while avoiding long-term financing and lease terms.
According to Hyundai, the program, which starts as a pilot in California early next year, allows buyers to “select one fixed payment that includes unlimited mileage, electric charging costs, scheduled maintenance, wear items and all typical purchase fees such as registration.”
Accessed and initiated via the internet, buyers select the vehicle, payment and subscription length (24 or 36 months), then go to their local dealer to sign off on the deal once their credit application is complete. No haggling, Hyundai claims. It’s like buying a phone. Millennials like phones, don’t they? Of course they do!
We’re left to assume that this pilot could expand to the rest of the country if it proves successful. Actually, we’re left to assume many things, as the automaker hasn’t mentioned what all-inclusive prices buyers can expect. Other details, such as early cancellation fees, also go unmentioned.
Clearly, Hyundai tapped deeply into market research on Millennials while crafting this plan. In a wide-ranging 2014 consumer study, Deliotte discovered a car-hungry population of young adults with clear buying preferences. Of the many factors that would compel a Millennial to buy a new vehicle, the top three were low cost, fuel efficiency and affordable payment options.
Convenience and eco-friendliness ranked high on their list of concerns, but Millennials also proved three times more likely to abandon their car if costs rose. Naturally, young adults proved the most accepting of new technology, including electric propulsion. Of them, 65 percent said they’d be willing to pay more for an alternative powertrain.
Now, what were those subscription costs again?
[Image: Hyundai]
So essentially, this a pre negotiated lease with a maintenance plan rolled into it.
Doesn’t seem that revolutionary to me.
Yeah, but it’s also organic, non GMO and gluten free. The millennials will be beating down the doors of Hyundai!
If I can simply cancel my “subscription” at any time without penalty, it does seem at least a bit innovative.
They’re there – I guarantee you there’s a high penalty for early drop-outs. They want reliability in fleet planning.
F them, if you product doesn’t suck the chances of early cancellation are greatly diminished. I’m tired of coddling these multinationals. Burn it all down shall be the rally cry.
Agree and don’t lease deals often have maintenance already included?
My low buck Cruze lease deal came with “free” oil changes and tire rotation.
Not revolutionary, but in a world where Millenials (and I include myself in this) are taught calculus but not the basics of personal finance, I can see it having appeal. It’s some money for some car, no unexpected costs (within reason) or random variability.
I’ll sign up for it in a heartbeat. I’m looking for an 24-month “lease”, so making one payment and everything is covered is right up my alley.
Plus my commute is 17 miles roundtrip, and basically in a straight line (I drive on three streets to go to work), so an electric car is near-ideal for me.
This is a smart idea, even for old people like me. A “no surprises” monthly payment is pretty attractive for being able to own a new car. Too bad it’s EV only. Seems like they could at lease offer the option of a base Accent as well.
Depends on the termination penalties. The reason millenials are enmoured of plans like this is because, on average, they aren’t paid a lot, have huge amounts of debt from school and their prospects of permanent, gainful employment are comparatively dim.
I can see them signing up for this, but I can also see issues–for both the manufacturer and the customer–when you’re in a vulnerable employment cohort. Especially over the next few years.
No problem, your lease down payment can go on a credit card.
Really another subscription service? You all are going broke with all these payments.
Many Millennials are entirely unable or unwilling to calculate total cost. They see a monthly fee, think “That sounds reasonable and cheap!” and then pay it with nary a further thought.
Exhibit A: Phone “e-z pay” payments of $23/mo for 24 months ($25 sounds expensive, $23 doesn’t), then you give the phone back(!) and subscribe to a new one.
Yes, $552 is a screaming deal.
$23? I’ll take five!
I would not be so quick to categorize “unwillingness” as the source of this behavior, nor would I specify that this is millennial behavior. There are a lot of people in a situation where saving up the dough for a single large purchase is difficult, and payments are the only way to afford an important item like a car or smartphone. Not a lot of people can save up the money it takes to buy a new reliable car in cash, either.
Example A may not be the best example in this case. T-MO, for example, has a zero-interest payment plan for their phones and other carriers will include the price of the phone into the monthly payment anyway. Since phones go obsolete fairly quick, this also saves the consumer the trouble of having to sell the phone, etc. Moreover, $550 is flagship territory for smartphones.
A better example would be those Rent-to-Own stores. I’ve seen rims, and even tires, being sold under the rent-2-own model, which includes weekly payments, all of which add up to an insane APR, on a generally frivolous item.
Yeah, I don’t think any of you sneering derisively at what “millennials do” or “millennials want” have actually ever asked them anything. You just sit on your high horse and assume.
+1 Fred
The real title for this is a “convenience lease.” Millennials are content to pay 135%+ for objects as long as it’s easy.
And that’s why they’ll never own anything.
It’s hard to conceive of “owning” something when you start off at 25 years of age with nothing but perpetual six-month contract jobs and $80K of school debt.
Rag on this generation all you like, but their economic prospects are the worst of any postwar (and many pre-war) generation by a wide, wide margin.
You do realize I’m one of them, yeah? I graduated college at the worst possible time in the recession, in May 2008.
Nope, I didn’t realize your age. I’m actually _not_ one of them, having graduated in 99.
I hire them, though, and it pisses my commie pinko soul right off.
This “recession” didn’t occur until the fall of that year.
Irrelevant. Things were sliding downhill leading up to that.
Things had been sliding downhill since 1999.
https://en.wikipedia.org/wiki/Dot-com_bubble
“And that’s why they’ll never own anything.”
Which begs the question of why you’d want to *own* something that depreciates like a rock…such as a Hyundai Ioniq. Personally, I’d rather rent it as cheap as possible and put whatever I’m not paying out on that into something with a chance of a return.
“select one fixed payment that includes unlimited mileage, electric charging costs, scheduled maintenance, wear items and all typical purchase fees such as registration.”
How will Hyundai reimburse people for charging costs?
The only scheduled maintenance on an EV should be a brake safety check and cabin filter swap.
Wear items? So I’m stuck with the crappy Kuhmo OEM tires Hyundai typically uses? EVs don’t consume brakes, and Hyundai brakes are dirt cheap, anyway. Maybe they’ll give me a set of wiper blades?
How will Hyundai reimburse me for my PA registration that I normally do online?
I’m guessing the answer is this: You have to visit the dealer for everything, at which time they entice you with the newest offerings.
Seems like a straight-up lease is a wiser choice, but convenience rules the day now.
All the Ioniq’s that I’ve seen in the press and at the shows were wearing Michelin Energy tires.
http://insideevs.com/wp-content/uploads/2016/12/Sean-1.2_00105.jpg
http://www.motortrend.com/2017-hyundai-ioniq-wheel/
I’m not sure how to ask without it sounding confrontational, but what’s the issue with convenience?
I imagine hyundai will give you a card that works at charging stations, and send you a rebate for your registration fees. Those don’t seem like questions they would have overlooked.
Because if a millennial prefers convenience, it’s because he or she is nothing more than an entitled, lazy piece of s**t, but if an older person chooses convenience, he or she is a Real American.
People are incredibly two-faced.
Vendors no longer want to sell stuff outright. Instead, they want into your pocket for a few or more dollars every month. That problem with that is that you never get off the treadmill.
You forget the products are mostly garbage you wouldn’t want to own long in any event.
These cash strapped Millennials probably don’t have a place to charge an electric car at “home”.
“It’s like buying a phone.”
That’s a deal-breaker. Leasing my Sonata took way less paperwork time than doing a phone upgrade…
Throw in some moustache wax, digital gift cards to a gastropub, and some xylophone lessons and we might have a deal.
If we could persuade the retro-hipster crowd that a manual transmission, like a gramophone, was more “authentic” than the soulless modern equivalent, that’d save them from extinction.
A second thought on this…are millennials, laptop and phone connected nearly from birth…reluctant to partake in the thrills of negotiating IN PERSON with those enjoyable folks at the car store?
Perhaps the plus here is minimal human interaction?
“Perhaps the plus here is minimal human interaction?”
Based on my current experiences buying a car, maybe that’s not such a bad thing…
If it really was a subscription I could just tear a card out of a magazine and subscribe to Hyundai for 12 months @ xxx dollars. Otherwise Hyundai’s scam is nothing but buzz words for a lease.
So, like a lease + Apple Care?
Millennials want everything free – free education, healthcare and how cars are different? Why not just subsidize cars for eligible millennials – those with no income or in come less than certain amount? Just idea. They are our future we have to take care of them.
Look. I like to dump on Millenials as much as the next guy, but at some point some of their gripes are legitimate. Public schools pretty much force students on a path to college, whether they should be there or not, and whether they can afford it or not. I eventually went to college, but it was a choice I made later, after taking shop classes, going to a technical school, and working as a tech for a while. There was a vocational path to follow. Nowadays not so much, at least not for the vast majority.
What are you on about Inside Looking Out? Millenials face the most expensive healthcare, education, and housing markets any generation has had to face. We’re also increasingly asked to do things like unpaid internships to establish ourselves (who’s asking for free stuff now?). When we ask for things for free (or cheaper), it’s usually because we’re suffering under the worst debt load in recent history. But please, tell us what we want and why we want it.
100% agree,I am making the same point – for eligible millennials everything should be free or partially subsidized. There is nothing more taxes on adults cannot fix.
As long as payments can be made on the last possible day with a credit card.
(I work with a 27 yo who pays his student loans with a cc on the day before a late charge kicks in)
Oh paying debt with a credit card is just a magical choice.