Younger drivers have reportedly had it with the dealership experience, with Gen Z even more disenfranchised than Millennials. Though it’s difficult to imagine anybody visiting a showroom within the last 12 months having any other reaction. Incentives are down, prices are up, and there’s a good chance whatever you wanted to buy isn’t going to be on the lot anyway. Someone saying they had an exemplary dealer experience is becoming about as common as people claiming they enjoy going to the DMV.
However, CDK Global Inc. still opted to conduct a survey in the hopes of determining just how much less tolerant younger shoppers might be compared to older generations. The takeaway probably isn’t going to shock you, even if the sheer volume of first-time buyers that don’t care for dealerships might.
The study, which was released on Thursday and subsequently shared by Automotive News, polled 1,100 recent car buyers in December 2021 and analyzed their preferences and hardships during the car-buying process — breaking down the results by age. CDK classified Gen Z as car buyers from the ages of 18 to 25, Millennials as 25 to 40, Gen X as 40 to 55, and Baby Boomers as individuals aged 56 and over.
From AN:
CDK said 81 percent of Gen Z members said their biggest priority when purchasing a car was taking their time and exploring all of their options, compared with only 73 percent of millennials, 60 percent of Gen Xers and only 45 percent of baby boomers. The survey also said members of Gen Z had more difficulty purchasing a vehicle online than older generations.
Brendan Dougherty, CDK’s director of product marketing, attributed this trend to 56 percent of Gen Z respondents telling CDK that they were making their first car purchase.
“For most of these consumers, this is their first major purchase, and they come in with some assumptions that they could do more of this thing online than what they really can do, because of the complexity of a car transaction,” Dougherty told Automotive News.
Luxury vehicles were also more popular among Gen Z, according to the survey, with 39 percent of buyers purchasing a luxury car compared with 27 percent of Gen X buyers and 12 percent of baby boomers.
That’s rather interesting since we know that Millennials hold almost 7 percent of the nation’s wealth today. By contrast, Boomers held 22 percent of the national wealth at the same age based on data provided by the Federal Reserve. Considering that this trend is presumed to expand over time, one would assume that Gen Z would be in even worse financial shape — not to mention having less time on Earth to accrue their finances. But it’s no secret that a lot of people purchase cars that are well out of their price range.
While your author would argue that the majority of today’s luxury vehicles aren’t really offering more bang for the proverbial buck than in past eras, marketing still makes them out to be a cut above their mainstream peers, and loan terms have expanded to a point where it’s not uncommon to see people paying a vehicle off for at least 70 months. Another possible explanation is that a majority of young adults (18-29) now live at home with their parents, even if they’re gainfully employed. By avoiding rent or mortgage payments, there’s a chance that a subset of Gen Z simply has more disposable income and has elected to throw that money at premium marques.
Regardless, the big takeaway from the study was that Gen Z doesn’t actually seem to like the process required to get into a new car and is far less likely to own one — be it fancy or humble. Almost half (45 percent) of Gen Z respondents told CDK they were frustrated by having to wait for a salesperson when going to a dealership and were the least likely age group to recommend any dealership to a friend or family member. The group likewise wanted to have a comprehensive understanding of their options over older individuals and took more time out of their week before making a final decision.
“[Gen Z] said that they wanted someone to help them, they wanted to take their time, but they also still valued speed,” explained Dougherty.
CDK basically exists to figure out ways of making the automotive sector money and often works directly with dealerships, so there’s some reason to believe the survey isn’t another attempt to undermine the dealer model so automakers can commence direct sales. Joe Tautges, chief operating officer of CDK Global, suggested dealers might benefit from streamlining the buying process while taking additional time to work directly with a customer to help them understand features while catering to their specific needs. But the company also works with manufacturers that seem to be advancing direct sales, so take all of the above with a grain of salt.
There are a lot of factors to consider here. Younger generations are not incurring the kind of wealth their parents did at the same stages of life, so big purchases have a lot more riding on them. We’ve already seen this with the housing market becoming prohibitively expensive after 2006. The number of renters living in the U.S. continued to climb while homeownership rates stayed relatively stagnant.
Vehicles have likewise grown substantially more cash-intensive over the last couple of years, forcing some people to spend more on a vehicle they can afford — rather than the one they actually wanted. This alone may be all there is to Gen Z having a lower tolerance for visits to the dealership and spending more time browsing for cars — with the issue potentially made worse by the current situation, where options are comparatively limited and haggling has nearly gone out the window.
Ultimately, these kinds of studies feel extremely familiar to the ones we saw for years citing that Millennials were buying fewer cars than their parents had. We’re just further down the path now, with the average American having even less economic freedom than before. The obvious solution is to get more money into the pockets of regular people to deliver a healthier and more stable automotive market. Something tells me the days of being able to overcharge customers are about to come to an end. But it has also historically been a lot easier to talk about fixing a broken market than actually getting the job done.
[Image: Gretchen Gunda Enger/Shutterstock]
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Questionable Book Recommendation:
https://www.amazon.com/TESTOSTERONE-PIT-Wolf-Richter-ebook/dp/B009NOFGXA
(Language advisory. Everything advisory.)
Best ‘dealer insight’ thing I’ve read lately — finished it in two days (and you know I never finish anything).
Thanks for the suggestion, I saw it was free on Kindle Unlimited so I got it. Great read! I want to be Ferronickel when I grow up.
I’m just along for the ride. I’m not a boomer, z or millenial therefore I’m not statistically interesting.
If you’re not a boomer, z, or millennial, you’re Gen-X, and the z’s are your kids – living with you!
You’re involved, whether you like it or not – your kids might hit you up for a down payment or repairs while their new ride is in the shop, not to mention advice when (not if) they get a recall notice!
You might even be the key player in convincing your parents – the boomers with cash – to help out their grandkids with transportation. You’re in the middle of it all, because you’re family!
He could be a member of “the greatest generation” as while they are dwindling rapidly are still around or one of the “silent generation” like Joe Biden.
If he is a.member of Gen -X that just means his generation was the last one with decent music.
You mean you don’t like Kanye West?
I thought that most of Gen-Z refuses to work, lives in their parents’ basement with their noses perpetually glued to a screen, and refuse to purchase anything that would even suggest harm to the planet! Carried further by advocating for roads with more bike lanes than for motor vehicles—in cities that have snow on the ground for more months out of the year than not!
Obviously I exaggerate, but there’s a few bits of truth in there!
With escalating fuel prices many of us might be riding bicycles. I don’t like buying a vehicle either and many but not all salespeople rank slightly above most politicians and slightly below most prostitutes. I will have to say the last salesperson I dealt with at the Ford dealer was professional and did not practice the sleazy sales tactics that many do so he was at least professional and ethical. I would say that most car salespeople have the sleaziness of Matt Gaetz who is the new face of family values in the GOP.
I found online vehicle shopping as exasperating as sitting in a cubicle listening to Mr. Polyester Pants try to sell me something I had next to zero interest in purchasing.
“You’ll LUV this time-share!”
(Until you see the 400% YOY increase in maintenance fees!)
Yep next they will be selling time-sharing in vehicles to make the payments more affordable. I have a special deal for you if you are willing to share your new vehicle which you will have access to from 12:01 AM to 5:30 AM and this deal is on a 60 month $1,200 down and you have 2 hours to act on this special offer. You are also responsible for all maintenance but we have a extended warranty that covers any additional out of warranty repairs with a $1,000 deductible but there are certain repairs in fine print (very fine print you can only see with a magnifying glass) that this additional warranty will not cover.
lol but so real!
I miss the sales guys with the polyester shirts, exposed hairy chests, gold chains hanging down on those chests, and with dark gold rim sunglasses where you cannot see their lying eyes.
Slime has been polished in sales seminars.
Lou you might be right about polished slime (also turds) but the older I get the less I trust people and the more my radar goes up. I don’t want to cheat anyone and I understand salespeople and dealers need to make a living and profit but I want a fair deal for myself and them as well. If the dealer doesn’t make any money then they will go out of business but they need to be honest and not greedy. Charging 5k and above MSRP, adding items to vehicles that few want to jack up the profit, and not honoring a warranty are just some of the deplorable tactics used by dealers. Salespeople who treat customers like they are stupid and playing games with customers also are things that many dealerships still do that making buying a vehicle as pleasurable as going to the dentist and having a tooth drilled or pulled. These are some of the things that turn people off to buying a vehicle and why a lot of people would rather just go on the internet and buy a vehicle or buy a vehicle directly from the manufacturer. People would rather get a fair deal without getting hassled and wasting time. Time has value as well.
I have been driving for nearly 50 years, bought or leased or arranged/negotiated the purchase/lease of well over 100 vehicles, probably closer to 200 counting company vehicles.
Yet, my experience with car sales people is quite different. Dealt often with 2 long timers, who were totally professional. Told them what I wanted and got it. Sometimes for a lower price than I have budgeted for. And due to their status, never had to go through the Sales/Finance Manager, etc.
Many other purchases were with young(er) people, trying to make a living, worried about losing their job/job status, just trying to make enough sales to get through another month.
The Sales and/or Finance Manager was often a different animal. But most often I had the ability to ‘shut them down’ very quickly. If not then was more than willing to walk. Once they know that you are willing to do that, but are also willing to sign ‘then and now’ if they meet your expectations, then they ‘come around’.
Yes I have had some tough negotiations. Once dealing with the owner/manager of a dealership had him throw his pen/book in desperation. Knocked everything off his desk and started to walk out. He the agreed to meet me more than half-way.
On 2 occasions actually had the sales rep in tears why I had it out with their Sales Manager. Again, got what I needed.
Things may be different right now, but during ‘normal’ times the buyer should have the upper hand. If you are willing to walk.
And if you develop a relationship with a long time, secure professional, then you need not go through the ‘sales dance’.
Bah! Kids these days! They don’t even like being jerked around by sleazy car dealers! What is this world coming to?!
Finally a generation that doesn’t go for the sleazy car dealers bs. Inflatable stick men blowing in the wind does not work for them.
No surprise – dealers for the most part are opportunistic scum. But while “car people” might be ok doing the wheeler-dealer thing, a lot of non-car people find the process intimidating. I get it; I always felt rather vulnerable wandering into a jewelry shop to buy stuff that I did not have solid knowledge about. Internet research only takes you so far – comfort zones can’t be googled…
No, they’re criminals. Except I don’t understand the “intimidation” bit. They’re not, I repeat NOT going to hit you in the face if you start at 25% off sticker (in normal times).
OK, D3 (or 2.5) pickups are already up to 25% OFF, again normally, but usually they just punch you HARD in the liver to not leave a mark.
“Though it’s difficult to imagine anybody visiting a showroom within the last 12 months having any other reaction”
My experiences in March were excellent, because there was no negotiation to be done. When you’re paying MSRP, all that’s left is the paperwork.
Our purchase was one of the best dealer visits I’ve ever had. And the same was true at two other dealers that I didn’t buy from.
There is no reason to visit a show room these days. Dealers don’t have any examples of the vehicles they sell in the show room or on the lot. I picked up some parts for my Mazda the other day and there were zero new Mazdas to be seen anywhere.
“When you’re paying MSRP, all that’s left is the paperwork.”
This has not been my recent experience even at dealers that claim to be selling “at MSRP.” They have all larded on both the factory accessories and the third-party stuff like (privacy-eroding) theft trackers, etching, tint, and on and on. There is still not much negotiating to be done, though, since they all have multiple people who are happy to buy the car at the larded-up price.
I’m bored with my car and keep sampling the water but it keeps on tasting bad.
“When you’re paying MSRP, all that’s left is the paperwork.”
The nice part about getting a vehicle before it’s on a dealer lot is that you are in a position to tell them “Zero add-ons”.
They act surprised. “Don’t ya want undercoat, mudflaps, seat protectant, nitrogen etc.
NO.
My experience is the same as dal’s – I’d love to get just MSRP, but forget it – every dealer I’ve spoke to has a non-negotiable “package” they tack on. We are talking worthless paint protection and other senseless junk. If you tell them your not paying for that crap they just point to the door and happily take the next customer’s money.
For the record Gen X here and I have always hated the dealership experience. The price is never the real price: there is always some add-on, extra fee, service charge, etc, etc. I live in FL home of the highest dealership/doc fees in the US.
@JMII – if the vehicle is on the lot your only option is to buy elsewhere.
During my search for a new ZR2 most of the dealerships were willing to forgo any add-ons. They tried to upsell but backed off when pushed.
I’d say a large part of it is being too stupid to understand what’s going on. Spending too much time worrying about pronouns and who can give birth and not enough time in things that matter like finances, how to make deals etc.
Probably why most of them rent. Can’t figure out how to get a mortgage
Lemme guess, you voted for Reagan’s second term?
I think he is too young to remember Reagan. Today’s Trump and Fox News Republicans would consider Reagan a liberal and socialist they would also disown Abraham Lincoln as well.
“I think he is too young to remember Reagan. Today’s Trump and Fox News Republicans would consider Reagan a liberal and socialist they would also disown Abraham Lincoln as well.”
You’re funny Comrade
Comrade EBFlex who can even politicize a simple discussion of what to have for dinner.
“ Comrade EBFlex who can even politicize a simple discussion of what to have for dinner.“
Pot meet kettle.
And you do realize that when you call me Comrade you are calling yourself comrade too correct?
Have a seat little boy
@EBFlex–You are too busy wining about things to have an interest in cars.
Sorry we didn’t grow up on third base and act like we hit a homer like the olds. Grew up in the easiest time in American history and still act like the young are lazy.
Question – those kids you all hate, who raised them? Did they spring forth on their own? Oh, right. It was you guys and your children.
So yeah, the boomers and Gen Xers were horrible parents if all that you said is true. We finally found common ground.
Frankly, the internet raised them and that’s the problem.
There’s a Grandpa Abe gif that would be appropriate here if only we could embed media.
Oh, and people rent today because they can’t afford houses that cost 4x as much in wage-adjusted terms as they did when you all bought.
Just personal experience here. Last year I had the good fortune of buying two new cars. In both cases I searched nationwide and found far better pricing than I could here in Colorado. The savings were enough to pay for far more than the plane fare and the trip back. In each case I contacted the dealers, and both of them were straighforward and honest. ZERO mind games. One of them insisted I finance through Wells Fargo for some reason. I paid zero interest because all I had to do was trump up a down payment amount and then the next payment I paid the car off. The other dealer just took the money upfront. I showed up at the dealerships, sat down signed a few papers and drove off. In each case I was prepared to take the loss of the plane trip out and the plane trip back if they had pulled the slightest trickery on me. I would have walked out. That was the risk of buying out of town but that didn’t happen. All in all, two completely satisfactory new car buying expereinces.
How weird is that? What more could I have asked for?
“What more could I have asked for?”
I once had a new vehicle delivered to me at my office and we did the paperwork right there. The lease payment was exactly where it should be. (The other dealers hated that dealer.)
My last salesperson was good as well but I have had many bad experiences in the past. I paid cash for my last vehicle.
What else don’t they like? Older buyers are just so used to the an@l r@pe, they don’t see it for what it really is. Automakers got greedy and have a huge problem on their hands.
I can’t feel sorry for them, but they’ve known it for years (before Covid-19). It’s just taboo to talk about, here or elsewhere, white elephant and whatnot. At some point you go for broke. Screw them.
In unrelated news, GM is busy denying warranty claims on 8-speed transmissions, common to millions of GMs, 2019 to ‘21, claiming it’s simply a “bad design” (therefore not covered) and in no way related to “defects in materials or workmanship”, mentioned in the warranty contract. Those are just fine.
What a lovely company.
Link?
Link? First just admit you’re “SilvyZ71” a “former” TTAC frequent commenter, GM lover who was banned right before you first showed up, also with an insane woody for Ford.
Anyway, I wish I could make this stuff up. Nobody’s that imaginative though, except GM of course (not when it comes to automobiles unfortunately).
GM pulled the same warranty denial sh!t on bad Corvette Z06 rims, yeah with a “defective design” again not related to materials/workmanship.
The crazy thing (or not) is that the courts have sided with GM (on the bad rims).
Technically or legally GM is right, apparently. TTAC is too Chicken to cover this bit of news though.
youtube.com/watch?v=QGA44xKGLpU
I sometimes suspect that BigTrucksReview is reincarnated here. Whoever they were should’ve given them self the moniker BigTrollReview, except that I think they had a YouTube channel they were trying to promote.
@DenverMike–Didn’t think EBFlex liked vehicles I just thought he was some political hack bloviating his political views and calling everyone who does not agree with him a liberal. SilvyZ71 maybe he is. He sure hates Fords. Most of us on this site come here to read articles about cars, trucks, suvs, and crossovers and we are less interested in politics and more interested in vehicles. I have owned many different brands of vehicles and don’t have a particular hatred of any brand.
Most brands have something worth owning or driving, from an enthusiast’s point of view, or excels at a purpose. Hopefully both, or it’s not on my radar.
Hate is a strong word, but it’s not GM vehicles that I have a problem with, necessarily.
I’m 99% sure it’s SilvyZ71 , and obviously it’s in TTAC’s best interests to look the other way, but I figured he wouldn’t just slither away.
“ Link? First just admit you’re “SilvyZ71” a “former” TTAC frequent commenter, GM lover who was banned right before you first showed up, also with an insane woody for Ford.…..”
Wow. Never expected such a tantrum when all I asked for was a link to something I could use to educate myself on the issue.
Love the rent free living in your heads though.
You gotta chill dude. It’s just the internet.
@EBFLEX – you want a link?
https://gmauthority.com/blog/2022/01/general-motors-hit-with-new-8-speed-automatic-transmission-lawsuit/
I’ll save you some scrolling:
“The automaker sought to have one of these suits thrown out last August, claiming the transmission problems are related to a design defect and not a manufacturing defect. GM’s vehicle warranties only cover manufacturing defects with parts and components and not design defects.”
One of the reasons why I am purchasing a diesel Colorado, NO 8 speed!
Is that how trolls get off? It makes no sense to the rest of us, but clearly it’s a major malfunction. Enjoy it I guess, I don’t care how you use my replies (in the privacy of your home).
Congrats Lou, except what’s to stop GM from denying your claim if god forbid, your diesel eats itself and GM pulls this sh!t on you? Or any major part.
Clearly GM is going for broke and thinking extremely short term. GM is not concerned with public trust, future sales and doesn’t care one bit who finds out.
Although they know the journos won’t print this story. It’s a major story if you ask me, but TTAC should seriously consider buying the vehicles they review and taking a small loss, if any when they sell a few weeks later, as does TFL.
*The Fast Lane Truck
Yes it’s that stupid money from YouTube. Rental reviews are good too, but you don’t get the owner experience or buying/dealer/service/warranty/recall process.
@DenverMike – the troll is being a troll. All the research I did points to avoiding the 8 speed.
GM and it’s avoiding warranty is BS. I’m going through a nightmare with Suzuki. 3 1/2 months later still no decision on a claim. At least the bike is just a toy and cheap relative to a car or truck.
Motorcycles are on a different planet with respect to warranty work. I had similar experience with Kawasaki
“I sometimes suspect that BigTrucksReview is reincarnated here”
I miss BigAlFromOz and Deadweight the most
As a back end Baby Boomer, I find the whole car purchase exercise the most humiliating event in life. All the games, all the smoke & mirrors, all the leading question, all the trashing of other manufacturers, etc, etc, etc.
I feel like I’m heading into battle. The moment I feel uncomfortable, I thank them for their time and walk out the door. That’s why I only buy a car every 7-9 years on average.
I’ve been told that some men feel more comfortable in divorce court than heading into a GM dealership.
Dear Automotive Dealer,
Your customers (and potential customers) think you have a problem, which means you have a problem, whether you really have a problem or not. You might want to think about that.
(If I were you, I’d wait for another 3-5 years before thinking too much about it, since you’re probably enjoying a very nice cruise right now while other people are actually managing your dealership. Things change pretty slowly around here and you’ll probably be just fine — probably.)
The manufacturer has started to think about all this too, but again, no rush — they don’t move too quickly.
Best,
Guy
P.S. Stock market is up up up and interest rates are low low low and this will never ever change ever. Enjoy yourself.
If you know what you want, 80% of the work is done. Problems are introduced when buyers are not educated/knowledgeable/savvy/confident enough to give a seller a number to hit and sticking with it.
Negotiating a car purchase isn’t much different than negotiating a starting salary for a job. Know what you want, be reasonable and be prepared to walk away.
Age has nothing to do with it. I have avoided many long trips to dealers who were swinging for the fences on pricing. Most asked me to ‘come on down and talk about it.’ Nah, the internet and phones have made negotiating much less time consuming and stressful.
@jkross22 – basically true. Go in preparing and be ready to walk away.
The reason why dealerships want you to go in is based on psychology and statistics. If they get you inside and in a cubicle the odds of getting a sale approach 80%.
The whole business model of today’s car dealers is to take information asymmetry and legal monopoly status (ensured by ample payment of protection money to state-level Republicans in most states) and use those two things to drive profit. That’s an extractive business model that is designed to make the consumer feel stupid and ripped off, and it’s no wonder people dislike participating in it.
“information asymmetry and legal monopoly status”
Disagree.
The internet has wiped out information asymmetry. Asymmetry occurs if you don’t do your homework.
Dealers aren’t monopolies unless you a) absolutely must purchase their brand of car, and b) can’t travel anywhere else to shop around for the same car.
This is why I don’t care if dealers mark up prices. It’s annoying, but I can go somewhere else for the same vehicle, and/or I can buy a different brand, or used for that matter.
Most people are not doing hours of internet research before they buy, and the dealerships are profiting massively from information asymmetry with respect to those customers.
As for “monopoly,” that was a sloppy word choice – I should have said “oligopoly.” The dealers have succeeded in more or less banning any sales model for new cars other than the current franchise dealership model, and those franchises are almost all controlled either by a few national chains or by local leaders who are extremely well connected politically in their states. There is little true competition.
Not if all the dealers are basically doing the same thing. And given the low inventory situation these days your options are very restricted. Sure I can buy a vehicle somewhere else but the further I go away from my home the more inconvenient the purchase becomes.
@JMII – I’ve had dealerships point out how inconvenience it was to travel to get a vehicle. I countered by telling them that their BS was also an inconvenience. There are many dealerships that will deliver to your door or help offset travel costs.
Well we know they have trouble reading loan documents given the so called “student loan crisis”. I imagine it’s stressful. All those numbers and math and being expected to repay the loan. Much easier to have mom and dad buy it for them.
Ok boomer, thanks to your peers we’ve had the same wages since the ’90s while costs go up. If wages kept up with everything else, paying student loans wouldn’t be a problem even for an art major.
Yawn. Not a boomer, thanks.
Pell Grant is what you want — nothing to pay back.
Why should we put up with the same problems imposed upon society for
literal generations when there is a better way?
Why pay for cable TV when we can get entertainment on our schedule and practically free of charge?
Between several friends and neighbors who have Gen Z kids going to college, they all hate cars. They want nothing to do with cars. They all want to move to cities that have mass transit, even if they don’t like everything else that comes with large cities.