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More millennials than others buying CPO

July 17, 2015
Given their increasing influence on the auto industry, there are several different schools of thought about millennials and their approach (or ambivalence) toward driving and car-buying, many of which have been explored in this publication.
Here’s another: They might actually be quite interested in the certified pre-owned inventory on your lot — in fact, possibly more so than other generations.
"The millennials certainly are not adverse to the CPO programs; (they’re) probably more amenable to them than the overall population," said Tom Webb, chief economist at Cox Automotive. "Certainly, they’re buying some new vehicles, but I think it’s rather illogical to assume that they’ll be like my generation where you move out to the suburbs and you put three cars in the garage."
According to a study from Edmunds, if a person age 35 or older bought a car last year, there was a 68 percent likelihood that car was used. But if someone in the millennial generation bought a car last year, the odds that it was used was 78 percent.
The root of this, said Edmunds.com CEO Avi Steinlauf, largely is the price-point. Millennials, he said, were hit the hardest by the recession, and it has been "a little bit tougher for them to rebound," thus making the used vehicle a more attractive option.  
But things eventually change.
"As they get older and their incomes increase, they start to mirror the broader population," Steinlauf said.
As for certified pre-owned, the study didn’t specifically ask millennials about this segment, but Steinlauf emphasized that the assurance and warranty offered by CPO programs would likely be appealing to those in this crowd that value such certifications.
Along those same lines, quality of the vehicle itself is important to millennials.
What often gets lost in the shuffle in media coverage of this generation and the importance of technology, Steinlauf said, is that millennials aren’t just in it for the tech and gadgets.
Granted, many certainly appreciate these features; looking at overall results, four-fifths of Generation Y put a strong emphasis on having smartphone features integrated into the car, and close to two-thirds (62 percent) would spend more if the car was Wi-Fi connected.
But the study found that price, fuel economy and performance rank much higher than in-car technology
Or as Steinlauf put it, millennials "have their priorities straight."
 
 

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