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Gen Z Prefers Face-to-Face Interactions, Test Drives, Study Shows

March 17, 2016

ATLANTA and IRVINE, Calif. — Generation Z — individuals up to 17 years of age — may have grown up with more access to technology than Millennials, but buying online isn’t in the cards for this emerging demographic, according to a joint study conducted by Autotrader and Kelley Blue Book.

The two firms set out to study how the 2008 market crash and having more access to technology has impacted Generation Z’s outlook on vehicle ownership. It's conclusion: vehicle sales will be alive and well when this demographic comes of age.

“Gen Z accounts for nearly a quarter (23%) of the population right now, and by 2020 this group will translate to $3.2 trillion in purchasing power, which is larger than the GDP of some small countries,” said Isabelle Helms, vice president of research and market intelligence for Cox Automotive. “While they will have access to some serious cash, they will be cautious about how they spend their money, a trait that makes Gen Z markedly different than their Millennial counterparts.”

While Gen Z is full of technology natives, only 26% of them said they wanted to buy a car online in the future. Sixty-eight percent of them said that face-to-face interactions during their vehicle transaction was important and 54% claimed they would need to test drive a vehicle before making a purchase.

About 92% of Gen Z own or plan to own a vehicle, according to the study. Of those surveyed, 97% said they possessed or look forward to earning a license. Many of them want a vehicle so much that they said they would be willing to give up social media, new clothing and access to their cell phone for a year in order to attain one.

The study further found that while the environmental impact of a vehicle is important to Gen Z — 27% said it was important to them — the majority of respondents said cost was the most important aspect of a vehicle purchase (72%). When asked on their opinion, more respondents said it was the gas savings rather than impact on global warming that would sway them toward environmentally friendly vehicles.

Gen Z is much more practical than generations before it, according to the study. The study compared every generation during their teen years and found that as the generations get older, the value of safety features begins to drop: 43% of Gen Z teens, 25% of Millenials as teenagers, 11% of Gen X as teenagers, and 9% of baby boomers as teenagers valued safety features. Gen Z also places more value on safety features than they do on infotainment centers.

More than 54% of Gen Z respondents found autonomous vehicles appealing. Notably, the major reason cited was safety — 61% of respondents said autonomous vehicles would make roads safer.

“What worked for marketing to Millennials will not work for Generation Z because some of the defining traits of Millennials do not hold true for the next generation of car shoppers,” Helms said. “The best news from this research is that auto sales are not going to take a hit because of this generation. In fact, it may prove to be quite the opposite. Their love for cars and driving is very much alive.”

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