Will The ‘Car Seat Test’ Save Auto Sales?
A single metric might determine whether Millennials keep driving their own cars.
Seemingly every day, we hear how a slew of transportation innovations — from ridesharing to a cloud of self-driving vehicles to a network of underground magnetic tunnels — will render the idea of driving a car obsolete.
However, this flies in the face of statistics that show younger Americans are actually adopting similar transportation and housing practices as their parents.
In fact, a 2017 eMarketer study found that some 43 percent of Millennials have said they’re either very or completely likely to purchase a car in the next five years. And this comes as car sales continue to ride a multi-year peak — at the exact same time ridesharing has taken hold as a multibillion-dollar industry.
In other words, ridesharing isn’t turning out to be a replacement for use of a personal car at all; it’s merely a situational complement to it. Just because you take an Uber home from the bar on Saturday night doesn’t mean that you won’t be hopping into your trusty commuter car on Monday morning.
But there’s another, more personal metric that ensures consumers won’t be ditching their vehicles for a life of ridesharing and shuttle-hopping: The Car Seat Test. Namely, if a new parent can’t keep a car seat permanently perched in a vehicle, they’re simply not going to use it to get around.
It’s one of those obvious reality checks that don’t often come up during high-minded conversations about the future of transportation. Nonetheless, it’s the kind of undeniable rubber-meets-road factor that does more to form our daily habits than any over-analyzed macro trend. And it renders the idea of exclusively using ridesharing — no matter how convenient for certain trips — as a complete non-starter as a permanent means of getting around.
Jessica Kane of Davis, Calif., is among them.
“With my youngest, a Lyft is only an option going to the airport,” Kane said. “Because hauling a car seat around — it’s, like 60 pounds. It’s just not an option.”
Besides the inconvenience, Kane said she refuses to participate in ridesharing while with her child because she’s not comfortable putting her child in a car driven by someone else — which makes having a car of her own an absolute necessity.
Kane’s concerns are easy enough to understand, of course. But aren’t Millennials skipping out on the whole domesticity thing? Actually, no.
Despite predictions that young people are resisting the nesting patterns of their parents, figures from the National Association of Realtors show that Millennials now account for 34 percent of home purchases — compared to 28 percent of homes bought by members of Generation X.
And while the multi-decade trend of having children later in life continues, some 48 percent of Millennials reported being moms in 2016 — with 1.2 million Millennial women giving birth that year, according to the Pew Research Center. The report also states that the majority of these Millennials find being a parent is central to their identity.
So what does all of this mean? It means that parenthood isn’t going out of style any time soon — and that more than a million new Millennials are facing their very own Car Seat Test each year. This is obviously great news for the auto industry. But everyone in the car business should also be heads-up about something else Millennials want alongside their vehicles: the ability to get them on their own terms.
“Not only are they deciding [online] what they want to buy, but where they want to buy,” Ally Financial CMO Andrea Brimmer recently told Digital Trends. “There’s more transparency in the process than ever before. When walking into a dealership, they’re very well-armed with that information, and they have a lot of info about the dealership itself.”
There’s no doubt that Millennials’ $1.3 trillion in annual buying power represents a potential treasure chest for dealers. But figuring out how to unlock it will be a more demanding process than ever.
“Especially in the younger generation, we’re seeing a different consumer base who doesn’t think of commitments on the same length of time as prior generations,” Libby Murad-Patel, vice president of marketing and strategic insights for Jumpstart Automotive Media, told Consumer Reports. “We move more frequently, our technology is updated every year or two years, and we’re not looking at a lifelong purchase.”
To accommodate this younger generation — the most educated, socially conscious and tech-savvy demographic the car market has ever seen — dealers are increasingly embracing flexibility of their own.
“I’m seeing more customers who just recently relocated, or customers who may have substandard credit,” said Danny Canteo, general sales manager of Subaru Santa Monica. “There’s a lot of them that don’t want to be tied into a three-year lease. They’d rather have the flexibility of being able to lease it for as long as they can and have their own free will. They like keeping their options open.”
One way that dealers are connecting with Millennials is through Fair, which allows customers to get a pre-owned car from one of Fair’s dealer partners right on their phone. They simply scan their driver’s license to get approved for a range of monthly payments they can afford, pick the car they want right in the app, sign with their finger, and drive it as long as they want — with absolutely no physical paperwork or long-term commitment.
Fair is able to unlock this powerful consumer benefit by buying the vehicle from the dealer outright and then contracting the car to the customer for as long — or as little — as they want it.
This allows customers to pass the Car Seat Test, while dealers can pass the “Couch Seat Test,” letting customers access vehicles on their lot without even leaving their house.
Canteo said providing new levels of flexibility and digital capabilities to customers is an important part of his dealership’s strategy going forward.
“Before, you just waited for them to come in,” said Canteo. “Now, everything has to be easier.”
