Growing up in the age of the internet and technology, Gen Zers are avid online shoppers. However, despite their affinity for online shopping, 80% of Gen Z drivers prefer to buy a car in person, with only 9% preferring to make the purchase online. This unexpected preference raises the question: what factors lead to this trend among Gen Z individuals?
Significance of In-Person Purchases
A recent report by Cars.com revealed that Gen Z adults value the in-person car buying experience, embodying their inclination to connect with the tangible aspects of a significant purchase. Senior director of industry data and insights at Cars.com, Rebecca Lindland, emphasizes that while extensive online research is conducted, closing the deal in person is perceived as beneficial.
The survey, conducted from August to September and including 4,000 participants across four generations, unveiled that affordability is a primary concern for Gen Z adults. It is crucial to understand that this generation faces numerous financial challenges as they navigate early adulthood, including student loan debt and high housing costs.
Affordability and Negotiation
Affordability plays a pivotal role in Gen Z’s decision-making process. The ability to physically test drive a vehicle and negotiate with dealers for potential discounts are compelling reasons for in-person car purchases. Industry analyst at AutoPacific, Paul Waatti, notes that involving oneself in the negotiation process can lead to a reduction in the final transaction amount, presenting a favorable outcome for buyers.
Car Prices in the Current Market
While
car prices remain relatively high, the market has shown signs of stabilizing. According to Kelley Blue Book, the average transaction price for a new car in the U.S. declined by 2.4% from the previous year. Additionally, used car prices are expected to stabilize by the end of 2024, indicating a shift from a seller’s market to a buyer’s market.
Empowerment through Financing
Despite the preference for in-person purchases, only 25% of Gen Z drivers opt for dealership financing. This statistic reflects their capacity to navigate financing options outside of dealerships, ultimately highlighting their financial astuteness. It is essential for Gen Z individuals to explore direct lending from banks or credit unions, as it could lead to more favorable financing deals. By obtaining pre-approved financing, individuals have the advantage of entering negotiations with a clear understanding of their payment options, ultimately empowering them to make informed decisions.
Conclusion
In conclusion, the inclination of Gen Z individuals to prefer in-person car purchases is a multifaceted phenomenon. It stems from their desire to engage physically in significant transactions, prioritize affordability, and employ savvy financial strategies. Understanding the driving forces behind this trend provides valuable insights into the consumer behavior of the Gen Z demographic concerning major lifestyle acquisitions.
