Millennials are buying everything online — except cars – Business Insider

Posted: Thursday, June 15, 2017


car
You can’t get that new-car
smell online.

Getty
Images


That new car smell is a powerful draw.

As many industries
struggle to adapt
to millennials’ preference for
buying experiences
and
shopping online
, one group of retailers seems to have been
spared, at least so far: car dealerships.

According to a poll from our partner, MSN, 62% of American
millennials (aged 18 to 29) plan to buy their next car in-person
at a dealership. Overall, 65% of Americans will head to a
dealership when it’s time to buy a new car.

MSN polls its readers, and then uses machine learning to model
how a representative sample of the US would have responded, using
big data, such as the Census. It’s nearly
as accurate
as a traditional, scientific survey.

For most purchases,
millennials lead the pack
 in ditching brick-and-mortar
stores: More than half of their total purchases in 2016 were made
online, according to a recent UPS Pulse Of The Online
Shopper
 report. 

But that doesn’t mean they plan to shop for cars the same
way. The excitement of seeing a car in the show room,
as well as being able to test drive it, are the main things
consumers would miss if they bought their car online instead of
in-person, according to a
recent report from Accenture

Online car dealerships, such as
Roadster
Carvana
and
Vroom
, hope to entice car buyers with promises like
free delivery and money back guarantees. Even Amazon seems to be
toying with the possibility of selling
cars through its site
. The idea isn’t new. Online
classifieds and auction sites like eBay have long made it
possible to research and even purchase cars online. 

Still, only 26% of millennials plan to shop online at
car-specific websites for their next car. 

Not that Americans are rushing to buy a new car anytime soon.
More than half, 54%, expect to wait two years or more before
purchasing a new car, according to the MSN poll. 

Among Americans who are shopping for a car, sticker shock doesn’t
seem to be a major concern. The MSN poll found
that only 20% of Americans consider price to be the
most important factor in the car buying process.


What's most important in a carMSN

Unsurprisingly, what millennials are looking for in a new
car differs from that of older Americans. While Americans over 65
are primarily interested in finding a car that offers
comfort and safety, millennials are more likely to focus on fuel
economy and design. 

The cost of buying and owning a car can be steep, especially for
those who choose to finance the purchase. According to the
MSN poll data, 55% plan to finance their next vehicle,
while 8% will lease, and 26% intend to pay with cash. 


How do you plan to purchase your next vehicleMSN

Auto loans are often difficult to justify, since cars are a
depreciating asset (they lose value over time). Among
millennials, rising auto loans, along with student loan debt,
continue to add to the growth of the $3.6 trillion in US
consumer debt,
an amount which is approaching a record 20% of GDP

All that debt is a drag on the US economy, but it’s also a
problem for those who struggle to keep up with their monthly
payments. Defaults on auto loans have been on the rise
lately, with the delinquency rate for subprime auto loans at

the highest level in at least seven years
.

Online car affordability calculators, like the one
offered by Edmunds.com
, could come in handy, even for those
who prefer to sign on the dotted line at the dealer. 

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