Every generation has its nuances and Generation Z is no exception. Learn more about the car buying and F&I preferences of the latest generation of adult consumers.
Getting to Know Zoomers
As members of Generation Z (born 1996-2012) or, “Zoomers” as they are often labeled, continue to enter the car-buying market, they display some notable preferences, concerns, and behaviors that savvy dealerships should be aware of. Less brand-centric than their Millennial and Gen X predecessors, Zoomers prioritize finding the best deal, a vehicle’s climate impact, and the quality of personal interaction when purchasing a new or used vehicle.
Budget Conscious:
It makes sense that the generation that came of age during COVID and who were the recipients of the notable inflation that followed are price-conscious buyers. Cox Automotive’s COVID-19 Consumer Impact Study reports that approximately 60% of Zoomers reduced their vehicle price range since the start of the pandemic. While laser-focused on overall quality, Zoomers will take their time to shop for the best deal, favoring enticing promotions and sales.
“Gen Z is a generation of financially pragmatic consumers. Growing up during a recession has made this generation especially budget conscious.”
A Focus on Eco-Friendly Alternatives:
According to McKinsey, 40% of Gen Z consumers say that environmental impact is a very or extremely important factor when making purchasing decisions, which is almost double the rate of boomers.
Known as the most climate-conscious generation, Zoomers prioritize sustainability over brand names. The World Economic Forum states that approximately 75% of Generation Z users surveyed prefer to buy sustainable products. And while sustainability is a priority for Gen Z, many feel priced out of the EV market when it comes to buying a new car. However, due to their pragmatism, Zoomers are exercising patience when it comes to purchasing a vehicle that aligns with their values and their wallet. They take longer to do their research and wait longer to get their finances in order. With that said, Statista reports that 41% of Gen Z plan to one day buy an EV to reduce their environmental impact.
Source: First Insight
Shop Online and Buy In-Person:
Known as “The Digital Generation,” Generation Z grew up with the internet, and their fluency in all things social media proves it. Unsurprisingly, Zoomers average over 3 hours a day perusing and interacting on social media platforms (Source: Oberlo). And while Zoomers do more online research than any other generation, they prefer to buy their vehicle in person. Bankrate states that 87% of Gen. Z consumers will make their purchase in person after conducting extensive research online.
Leveraging tools like YouTube to research vehicles, understand features using high-quality videos, and familiarize themselves with preferred dealers, Zoomers will eventually end up on a car lot. They will arrive informed and seek personable and consultative sales experience.
“YouTube is the most used social media platform among Gen Z, both in day-to-day use (82%) and to assist with car shopping (61%).”
F&I Buying Trends
An important part of any car buying experience is the presentation of Finance & Insurance coverages such as Vehicle Service Contracts and Ancillary Programs like Tire & Wheel packages. How does Generation Z differ from their predecessors when it comes to purchasing F&I?
It turns out that Zoomers do purchase these products when buying a new or used vehicle, but they prioritize different products than you might expect. According to a 2024 CDK Study, Zoomers buy 1-2 F&I programs on average but mainstays like VSCs and other popular programs are taking a back seat to coverages that focus on loss prevention and security. Due to increased crime rates and the amplified media coverage during the pandemic, many Gen. Z consumers fear for their personal safety and the safety of their vehicles.
As a result, Zoomer consumers are purchasing security systems and vehicle theft protection programs at a noticeably higher rate than generations past.
Source: CDK: What Does Gen Z Want in F&I Products
How are Dealers Adapting?
With an estimated buying power of $450 billion and growing, retailers in all segments are learning to adapt and cater to the preferences of Generation Z. The auto industry is no exception. Here are some of the practices of auto dealers who are connecting best with Generation Z.
Investments in Social Media:
Dealers who are active and effective in their social media efforts are catering to the needs and preferences of Gen Z. Regularly updating inventory online and leveraging the power of video on platforms like YouTube is an essential practice. If a young car shopper can’t find and interact with your inventory online, they are unlikely to step foot on your lot.
An Eye on Sustainability:
Salespeople who demonstrate deep knowledge of a vehicle’s environmental impact can connect with and reinforce the values of Zoomers. Prioritizing features like fuel efficiency, vehicle emissions, and overall sustainability will speak directly to these consumers and will facilitate the sales process.
A Personal Sales Approach:
Because Generation Z will arrive on car lots armed with a wealth of online research, they are not looking for a hard sell. Gen Z views the sales consultant as a trusted advisor who can make the buying process pain-free while reinforcing their values and ensuring their cost-conscious needs are met. Informing Gen Z consumers about promotions and incentive programs can go a long way!
Final Thoughts
At the end of the day, Sales is all about knowing your customers and catering to their specific needs. As Generation Z continues to age into the car-buying market, it will be imperative for Dealers to pivot their approach. With public transportation and rideshare programs more available than ever, Generation Z seems content to wait until the price and the experience are right before committing to a major purchase.
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