Automotive News Canada - September 2019 - 8

* S E P T E M B E R 2 019

I L L U S T R AT I O N B Y
TIMOTHY GOOD/AUTOMOTIVE NEWS CANADA,
WITH ISTOCK

GEN Y TAKES A U-TURN

They actually do
want to own vehicles;
they're just getting into
the market later in life
than other generations

Used-car buyers by generation

By DOUG FIRBY

CALGARY CORRESPONDENT

MILLENNIALS, ONCE THOUGHT TO
be the harbinger of doom for the auto
industry, are emerging as key players
in its future. And they are gravitating
toward used vehicles, particularly utility models.
Many millennials - defined by J.D.
Power as people born between 1977 and
1994, and also referred to as Generation
Y - have moved to the suburbs, started families and realized they need bigger vehicles to accommodate the kids.
"Ownership by millennials is
going up quite nicely," said Dennis
DesRosiers, a Toronto-based auto analyst. "It is biased towards used [vehicles] because youth wouldn't have the
finances to buy new, like the older generation."

Generation Z (1995 and later)
Generation Y (1977-1994)
Generation X (1965-1976)
Baby boomer (1946-1964)
Pre-boomer (1945 and earlier)
Millennials make up 37 per cent of
all used-vehicle buyers in the United
States, according to J.D. Power. In
Canada, millennials also are biased
toward the used-vehicle market.
CHART SUPPLIED BY J.D. POWER

in part to the emergence of millennial
car buyers.
NEW PREFERENCE: USED
While annual new-car sales remain
DesRosiers said reliable
in the two-million range, the
generational sales data for
real news is in used cars:
Canada is not available, but
DesRosiers predicts the mara number of factors logicalket will grow by roughly
ly point to greater millennial
500,000 a year over the next
vehicle ownership.
three to five years.
For one, the number of
More than 3.1 million
licensed drivers in the 25-34
used vehicles were sold in
age group, which close2018, he said.
ly reflects the millenniAnd according to a 2018
Analyst Dennis
al ages, increased 14 per
study by Carfax Canada, 73
DesRosiers
cent between 2004 and 2015,
per cent of millennials feel
says millennials
according to DesRosiers'
generally gravitate confident purchasing used
data.
vehicles. It also showed that
to used cars
"There's a view out there because of budget while used passenger cars
that youth aren't even getmade up the bulk of purconstraints.
ting drivers' licences, and
chases, almost 44 per cent
FILE PHOTO
that's just not true ... if you
bought utilities, pickups or
get a driver's licence, the intention is
vans, said Drew Harden, manager of
to get a vehicle."
research and insights at Carfax.
Vehicle ownership, he said, is at an
Many millennials prefer used cars,
all-time high - 88 per cent of the total
DesRosiers said, because they want
driving age population - and it's due
to avoid the hit on depreciation and

Washington, D.C., said
millennials tend to get
their driver's licence later
in life than previous generations, primarily for
economic reasons.
"But as they age, their
behaviour starts to mimic
that of previous generations," Ivanova said.
Millennials buy used
because they are more
J.D. Power researcher
price-sensitive than previMaya Ivanova
ous generations. However,
'I JUST NEED A CAR'
says millennials
Ivanova said, their prefprefer late-model
erence is for "new" used,
Susan Gubasta, CEO
used vehicles
which are late-model vehiof Mississauga Toyota,
that have current
cles that have current
said millennials who are
technology, such
technology, such as backentering the market will
as backup cameras,
up cameras, lane-deparoften come to a dealership
lane-departure warning ture warning and smartand say they have only so
and smartphone
phone integration.
much money to spend -
integration.
They "connect their
$10,000, for example.
digital lives to the vehi"They say, 'I just need a
cles," she said. "They are digital
car,'" Gubasta said. "They need mobilinatives."
ty. They need to move."
Over the last two years, the numTURNED ON BY TECHNOLOGY
ber of millennial car buyers for both
Although Ivanova's research
used and new vehicles has increased
focused on the United States, the
by about 20 per cent at Mississauga
behaviour of Canadian millennials is
Toyota, she said.
comparable, she said. The demograph"We're seeing a better mix [between
ic makes up 37 per cent of all used-veolder and younger customers]. We're
hicle buyers south of the border.
appealing to a wider demographic."
CarGurus, the U.S.-based research
Maya Ivanova, a senior quantitative researcher at J.D. Power in
and shopping website that compares
local listings for used and new cars,
found that millennials are "much more
excited" about technology advances than previous generations, said
Madison Gross, director of consumer insights. That includes electric and
autonomous vehicles.
Millennials often feel urgency to
purchase vehicles because they are
experiencing a major event in their
life, like having a baby, Gross said.
They are more likely to buy used, she
said, because they often have less time
to save a for down payment than previous generations did.
Susan Gubasta of Mississauga
"It's OK to have a clunker," Gross
Toyota is seeing "a better mix" of
said, "when you don't have a kid in it."
younger and older buyers as more
- ANC
millennials who just need mobility are
coming into her dealership.
- With files from Grace Macaluso
PHOTO: PERRY LEFKO

because their incomes tend
to be lower than those of
previous generations at the
same point in their lives.
With improvements in quality, buyers can find vehicles
in reasonable mechanical
order for less than $5,000,
he said.
"They're dirt-cheap.
And what does a millennial want but an affordable
car?"

Automotive News Canada - September 2019

Table of Contents for the Digital Edition of Automotive News Canada - September 2019