How Dealers Can Win Over Gen Z Buyers

This article initiates a series analyzing this year’s Urban Science/Harris Poll survey. The survey delves into consumer perceptions of the relevance of the traditional automobile dealership model.

This year’s Urban Science/Harris Poll offers welcome news for dealers looking to boost profits, gain customers and build loyalty. Data shows Generation Z consumers highly value dealerships, even more than just a year ago.
That’s significant news for dealers. Not only are Gen Z consumers – those born after 1995 – more interested in car ownership than previous generations, but they also have the credit scores and financial means to buy or lease.
And, of course, Gen Z begins a new generation of retail shoppers.
This interest in vehicles becomes particularly vital in the current market, marked by an abundance of inventory, high interest rates and a prolonged buyers’ market following the chip crisis and pandemic.
Other factors, including cautious lenders, high gas prices and fluctuating manufacturer incentives, have stalled sales and driven down dealers’ profits. Consequently, some dealers have implemented cost-saving measures, including hiring freezes, that can result in harried employees who don’t meet customers’ needs for information or timely service.
However, dealers can change this trajectory and zero in on the Gen Z consumer.

Gen Z Perceptions
The 2024 survey by Urban Science and The Harris Poll reveals a notable increase in Gen Z consumers’ perceptions of dealer relevance, rising seven points year-over-year to 67% positive. This places the figure close to the “strong” index range, reflecting Gen Z’s belief that dealerships provide the necessary resources, tools and technology to facilitate vehicle purchases seamlessly.
In contrast, 62% of baby boomers, 59% of Generation X and 63% of millennials deemed dealerships relevant. 
That’s not the only area where Gen Z respondents diverge from their counterparts in other generations.
More than half (51%) of Gen Z respondents believe dealers possess the necessary resources, tools and tech to make buying a vehicle easy and convenient. That’s up 19% YoY. Those in other generations that strongly agree are 42% millennials, 35% Generation X and 44% baby boomers.
The survey also found that almost half (47%) of Gen Z respondents trust salespeople’s expertise to assist them through the complex vehicle buying process, up 14% YoY. Those in other generations who strongly agree are 40% millennials, 28% Generation X and 32% baby boomers.
Moreover, the survey indicates that 46% of Gen Z consumers (up 14 percentage points YoY) consider dealers to play essential roles in car buying. In comparison, 51% (up 19 percentage points YoY) believe dealers possess the necessary tools to make buying a vehicle easy and convenient.
Yet there are disconnects between dealers regarding Gen Z consumers. They are the generation most likely to consider nontraditional dealers, including CarMax, Carvana and others. Gen Z respondents interested in such disruptors grew 17% between 2023 and 2024 to 74%. That compares with Millennials (70%), Gen X (60%) and Baby Boomers (40%).
More striking is that data shows 47% of Gen Z respondents trust salespeople’s expertise to assist them through the complex vehicle buying process. Although that’s up 14 percentage points YoY, there is still a 28% gap in perception between dealers and consumers, with dealers overestimating their value. That gap is a warning sign that dealers must continually improve their processes.

How Dealers Can Satisfy Gen Z Consumers
The data from this survey shows what Gen Z consumers want when they shop for vehicles. That information can steer dealers toward bringing more Gen Z consumers into their dealerships and gaining the rewards with increased market share.
As many have said, the Amazon shopping experience has set a high bar for all retailers. But as auto dealers educate staff, adopt artificial intelligence and offer newer products, they can build hybrid sales models that appeal to all customers, especially Gen Z consumers.
Dealers can combat that migration by ensuring they meet Gen Z’s shopping expectations, whether they want to shop in-person or entirely online. Strategies to meet Gen Z’s wishes include:

Offer shopping flexibility, including through an omnichannel shopping experience.
Gen Z is more willing to consider full digital retailing than consumers of other generations. Almost half (43%) of Gen Z respondents are open to purchasing vehicles fully online. Millennial consumers are even more enthusiastic, with 47% of them considering full online vehicle purchases.
Most (68%) Gen Z consumers would consider purchasing from a traditional dealership’s website. And even more (80%) millennials would do the same. That millennial figure is 9% higher YoY.
Of course, that data doesn’t mean dealers should abandon showrooms. The majority (87%) of Gen Z are open to considering traditional in-person shopping at dealerships. It implies that dealer flexibility is critical to growth.

Maintain a consultative environment.
Gen Z respondents’ desire for traditional dealership experiences goes hand-in-hand with their desire to work in a consultative environment.

Almost half (43%) of Gen Z respondents say such dialogues can increase their likelihood of visiting dealerships. That is 14 percentage points higher than auto buyers of other generations.

Lean in on EVs.
More than half (56%) of Gen Z respondents say they will be ready to only accept EVs by 2030, which is eight percentage points higher than the average of consumers of other generations.

Not only are they more willing to consider EVs, data shows they are willing to pay a 47% premium above comparable ICE vehicle prices — and that’s 19 percentage points higher than the average of auto buyers.
Dealers can make moves to ensure they are prepared to consult with prospective EV buyers by training staff, offering customer education post-sale and working to advance charging station availability.
It’s important to note that Gen Z shoppers consider more brands (2.7) and visit more dealerships than shoppers of other generations.
While some might consider that a negative, dealers can make the interest in shopping various dealerships work for them by using smart marketing strategies to entice Gen Z customers to their showrooms.
One successful strategy is to offer – and market – incentives for test drives. Data shows incentives would entice 87% of Gen Z shoppers to test drive a vehicle. Almost that same number (83%) say incentives would make them test drive EVs.
As dealers regain their footing from economic headwinds and supply chain disruptions, they will find opportunities to grow through working with Generation Z consumers. The best way for dealers to do so is to ensure they provide the sales flexibility and consultative environment preferred by Gen Z consumers.