Q&A: Six Ways Gen Z is Transforming Auto Purchases
Same-day shipping, orders at the click of a button, e-commerce, automation, are all elements that strive to meet the ever-demanding market of consumers with Amazon standards, speed, and accuracy. While many millennials learn to adapt to this consumer culture, Gen Z understands it as a common standard.
Global Trade Magazine had the opportunity to take an inside look at how Gen Z is transforming auto purchases in an exclusive Q&A with Grant Feek, co-founder and CEO of TRED.
Why are consumers, particularly Gen Z consumers, moving away from the traditional auto purchase approach?
“Firstly, our data suggests that gen z consumers are very interested in owning and driving vehicles. Many prognosticators conflate the pending adoption of automotive technologies, such as autonomous drive, with a pending decline in car ownership rates – we don’t see the latter trend in our data.”
“Secondly, our data suggests that gen z consumers are more likely to purchase and sell vehicles in non traditional ways – we suspect that this trend has less to do with gen z’s overt aversion to buying a car traditionally, and more to do with the facts that gen z is (1) more comfortable using computers / trusting online marketplace technology and (2) less engrained in the pre-existing traditional vehicle purchase / sale process. In the same way, gen z’ers are more likely to have groceries delivered, rent clothing, hold cryptocurrency, etc.”
What is it about a dealership consumers are trying to avoid?
“Our data suggests that the #1 complaint with the traditional dealership buying experience, for all consumers (not just gen z), is that it takes too long. We also hear a lot of complaints about pricing.”
What negative associations are seen with Gen Z consumers and new car purchases?
“I don’t think that gen z sees negative connotations associated with car buying so much as gen z has more progressive consumer expectations. It’s important to keep in mind that these kids grew up with iPads in their laps and Amazon Prime at their fingertips. They’re conditioned for internet research and purchase convenience from birth.”
In what ways will the industry have to change to capture the attention of Gen Z consumers?
“Today the technology exists to allow consumer counter parties to deal directly with one another, without the middleman, while still enjoying the vehicle assurances and payment conveniences that they would get at the dealership. We think that’s the future of used car buying and selling for gen z in the US, as well as for everyone everywhere.”
What are the unique needs Gen Z brings to the auto industry? Are they realistic? Will they eventually phase out?
“In the used car space, gen z buyers expect price transparency, vehicle history information, vehicle inspection information, the option to test drive, payment options, vehicle service and GAP options, and transaction assurance. Gen z buyers and sellers expect the very best of value. We don’t think these trends will phase out. We think the next generation will be even more “demanding” than is gen z.”
In what ways are peer-to-peer car marketplaces changing the game?
“Peer to peer car marketplaces change the game because they put thousands of dollars per transaction back in the pockets of consumers – you can see Tred’s real time savings data here. In this way, we believe that peer to peer marketplaces will change how many high ticket products are transacted in the coming years: cars, motorcycles, RVs, yachts, boats, bicycles, homes, etc.”